UK votes in favour of Brexit delay
The third Brexit vote for the week has been done-and-won, and the result went as expected.
MPs in the UK House of Commons voted in favour of extending the March 29 Brexit deadline, by a margin of 412-202.
In effect, the vote supports a delay of Brexit to the end of June, provided that the House throws their support behind Prime Minister Theresa May’s twice-rejected deal. Though now a higher likelihood, this is isn’t consider a sure thing, even despite some Brexiteer MPs showing signs of crumbling under mounting pressure from Bremainer forces.
Complicating matters, and stifling optimism in the market, this morning’s vote isn’t legally binding, and requires, essentially, ratification from the EU – an outcome that is not necessarily assured, either. Hence, a no deal is still on the table, and means that many of the same uncertainties that existed before this week’s round of voting, for market participants, remain.
The Labor opposition appear now to be turning the proverbial screws in their bid to destabilize the Tories, calling for a second referendum on Brexit, although what shape this may take hasn’t been defined. Another complicating factor is what an extension will mean for the UK and EU parliamentary elections at the end of May.
Overall, what has come out of Brexit this week is a delay, and perhaps a simple prolonging of pain for the UK, Europe and financial markets. All the risks, while shifting shape, are all still present in one form another. The sterling has reflected this dynamic: it’s pulled back this morning from the top of its stubborn range.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
Live prices on most popular markets