With less than three weeks until a self-inflicted Brexit deadline there is still no certainty about what the final process will look like - or if it will even happen.

The Pound fell as British MPs resoundingly rejected PM Theresa May's last-ditch effort to reach a negotiated deal with the EU.

But it recovered ground later and broadly markets stayed calm - amid considerable chaos.

The second parliamentary rejection of May's negotiated deal with the EU leaves just two possible paths.

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One is a hard Brexit, which sees the UK leave without a deal.

The other is a delay to the March 29 deadline - which could mean another referendum to break the stalemate.

"I think what has calmed markets is that Theresa May allowed MPs to have a vote to say no to hard-Brexit," said Pie Funds UK-based analyst Guy Thornewill.

Tomorrow morning (NZT), Parliament will put a hard "no-deal" Brexit to a conscience vote and it is expected to be rejected.

A hard Brexit would be the disaster scenario that has had Brits talking about stockpiling food and essential medicines as borders would close in advance of any trade talks.

It's a scenario that also poses risks for New Zealand export goods - lamb and wine in particular - which are often shipped in to Britain and then redistributed through European retail networks.

But it is also an unlikely scenario.

Only the most hard-line Brexit advocates favour leaving with no-deal, Thornewill said.

Assuming the no-deal Brexit is rejected then there will be another vote where MPs will have no choice but to request an extension to the March 29 deadline.

Unfortunately for the Brits, that will also have to be approved unanimously by the 27 EU members.

"The problem is, will the EU agree?" Thornewill said. "And how long will they agree for."

It was unlikely that they would say no but a short extension would simply leave things locked in the current stalemate.

British PM Theresa May could have leadership challenged due to the latest failure. Photo/Getty Images.
British PM Theresa May could have leadership challenged due to the latest failure. Photo/Getty Images.

Any progress would require a much longer extension to allow for another referendum or even a general election.

May's strength as leader of the Conservative Party will be further undermined by today's loss and she might face a leadership challenge.

A referendum is most likely to be on support for a workable Brexit deal.

But there will also be powerful political forces pushing for another vote on whether to leave at all.

It was not clear how the much public had shifted on the issue since the 2016 vote, Thornewill said.

But it was likely that it would still be close and highly divisive.

The sticking point on an orderly Brexit deal remains the land border between the Republic of Ireland - which is part of the EU - and Northern Ireland, part of the UK.

While politically divided, the two Irish economies are now intimately intwined and need to maintain an open border.

As Bloomberg noted, 18,000 trucks loads of Guinness alone cross the border every year.

May and the EU have proposed a "back-stop" for that border.

It would see Northern Ireland stick more closely to EU rules than the rest of Britain.

It would also effectively keep the UK in a customs union with the EU until a solution was negotiated.

But many Brexit supporters oppose that as they think it wil keep the UK tied into the EU and there won't be a real Brexit.

The EU won't budge. Either British MPs accept the back-stop deal or the border will close.

That's even raised fears that a hard border might reignite the kind of nationalist violence that troubled Northern Ireland for decades.

After this morning's vote, it's clear that a majority of British MP's won't budge either.

So there is a stalemate that won't be resolved by the current parliament and there is no prospect on any certainty for some time.