Pound shifts higher as second referendum hopes gain traction
Pound shifts higher as markets factor in potential second referendum, while Brexit woes over UK motorists begin
Prime minister Theresa May’s no-confidence vote has impacted the markets, but the impact has only been contained to the UK and European markets, and mostly in currencies and bonds, according to IG market analyst, Kyle Rodda.
‘Interestingly enough, Labour's failed no-confidence motion has markets betting that a second referendum could be on the cards. The Pound has shifted higher after the initial vote on the basis of that.’ Mr Rodda said.
Sterling rose 0.05% against the dollar to $1.287 on Wednesday after May’s Brexit deal was defeated, but steadied after May's government won the no-confidence vote overnight.
May's Plan 'B' due by Monday has the market reacting with the assumption that there could be an extension of the Article 50 exit date past March 29.
No Brexit deal troublesome for UK motorists
Meanwhile, a UK insurance trade body has warned UK drivers that if politicians fail to strike a Brexit withdrawal deal, driving in the EU could become illegal without insurance.
The Association of British Insurers (ABI) warns consumers and companies who plan to travel by road In the EU after Brexit day, may need to provide a ‘green card’ from their insurer one month in advance.
The advice came just one day after prime minister Theresa May’s proposed Brexit deal was ousted by MPs.
The ABI said the European Commission has failed to confirm a waiver of the green card scheme that was agreed by insurance authorities in May, with the same requirements applying to EU motorists travelling to the UK after Brexit.
According to the ABI in 2017, 2.4 million heavy good vehicles travelled from the UK to the continent, while a further 370,000 travelled to Northern Ireland, according to official statistics.
‘It remains the case that insurers do not want a 'no deal' Brexit; it would be bad for the economy and bad for our customers. We continue to hope these arrangements are never needed and urge the Government, UK Parliament and EU27 to agree an orderly way forward,’ said ABI Director General Huw Evans.