CFDs are complex instruments. You can lose your money rapidly due to leverage. Please ensure you understand how this product works and whether you can afford to take the high risk of losing money. CFDs are complex instruments. You can lose your money rapidly due to leverage. Please ensure you understand how this product works and whether you can afford to take the high risk of losing money.

Brexit update – time to vote again?

After the events of last week, the UK still faces an impossible situation, but the clock is ticking down to the March deadline.

The UK is hurtling towards its exit date with the EU, but no one seems to be in charge. By 21 January, the government must present its withdrawal agreement to Parliament for a vote. If it does not, then MPs will take over the process, which may well make ‘no deal’ less likely (since there is no majority for it in Parliament). This suggests a delay to Article 50, if not its complete revocation.

At present, the maths in Parliament point towards a three-way split – 119 MPs in favour of ‘no deal’, 220 favouring Prime Minister Theresa May’s deal, and 300 pro-remain (though their task is complicated as many of them represent Leave-voting areas).

No one side has a majority, which does not augur well for progress on this front. May’s victory last week in the no confidence vote leaves her immune to another no confidence vote by her party for 12 months. This does give her plenty of room for manoeuvre, in a sense, since she can now move towards a second referendum without fear of a fresh challenge from those behind her.

But this will require cross-party support. And Labour is still happy to sit back and watch the Tory party implode. Polling over the weekend saw two polls, one with a small Tory lead and one with a small Labour ascendancy. But not enough to make a Labour win, or even a rainbow coalition, a certainty. A no confidence vote is possible, but even then, a Labour win is not guaranteed, and if they do, they have 14 days to form a government, or an election will have to be called.

Unfortunately for Labour, to beat the Conservative’s 317 MPs, they would need to cobble together a coalition of Labour, SNP, Lib Dems, Plaid Cymru, the Green Party and the DUP (257 + 35 + 11 + 4 + 1 + the DUP’s 10 = 318). Such a coalition would be unlikely to hold together for long, especially since the Lib Dems and SNP are wholly against Brexit.

As has been the case since the referendum, no one calling for a second vote has exactly defined what the vote would be about. Last week’s decision by the European Court of Justice (ECJ) suggests the UK could revoke Article 50 and go back to the situation on the morning on 23 June, with its membership, but more crucially its opt-outs, still intact. This is a huge boost to the Remain cause, as they can argue that we can merely pretend the last two years were a dream, and that the UK can go on as it would have done had Remain won the first time around.

We could therefore have a three-way vote, with no deal, May’s deal and Remain on the ballot paper. This might split the Leave vote and leave Remain with a victory at the last minute. But such a possible outcome still needs Parliament to pass the legislation for another vote, and that took seven months last time when the Conservatives had a clear majority. While the Brexit side is now split no deal/May’s deal, Remain may split between second referendum/Article 50 suspension or revocation.

The clock is ticking, and in time a clear caucus for one decision or another may emerge. But time is running out.

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