Theresa May, U.K. prime minister, departs from number 10 Downing Street to attend a weekly questions and answers session at Parliament in London, U.K., on Wednesday, Jan. 16, 2019.

The worst parliamentary defeat for a British prime minister in modern times has increased the likelihood of Brexit being scrapped altogether, Goldman Sachs said Wednesday.

British lawmakers voted overwhelmingly to reject Prime Minister Theresa May's proposed template to leave the EU on Tuesday evening, thrusting the world's fifth-largest economy even further into political chaos.

Defeat for the U.K. government comes with time running out before the country leaves the bloc on March 29.

"We still expect a slim majority of MPs to ultimately consent to a close variant of the current Withdrawal Agreement," Goldman Sachs' European economist Adrian Paul said in a research note published Wednesday.

But, the nature of May's Brexit vote defeat does "skew the risks to that base case further in the direction of a softer, later Brexit — or no Brexit at all," Paul said.