British Parliament rejects no-deal Brexit, pound rises 2%

The pound rose by more than 2.0% on the rejection of the ‘no-deal’ exit, gaining to a peak of US$1.334 from Wednesday morning’s US$1.309.

Source: Bloomberg

The British Parliament rejected leaving the European Union (EU) without a deal on Wednesday, voting a narrow 312 to 308 in favour of a motion that ruled out a no-deal exit.

Although the approved motion has no binding authority to cast things into stone, it was seen as a political assertion due to an internal rebellion from members of United Kingdom’s (UK) prime minister Theresa May’s own Conservative Party.

Mrs May said going forward, lawmakers will have to agree on how to handle things before an extension could be reached.

The pound rose by more than 2.0% on the rejection of the ‘no-deal’ exit, gaining to a peak of US$1.334 from Wednesday morning’s US$1.309.

Extension of March 29 deadline the likeliest scenario

The UK has a few options now: To delay Brexit, to pass Mrs May’s deal in the last minute, or ignite another referendum.

Britain would have to justify with reasons to the EU why it wants to extend talks for Brexit, as well as get an agreement from all the bloc’s 27 members on its plans to delay its exit.

Investment banks are giving their views on the Brexit outcome, as the end line draws near.

‘We continue to see a 55% chance that a close variant of the prime minister’s Brexit deal is eventually ratified, after a three-month extension of Article 50,’ Goldman Sachs said in a Reuters report. The bank gave a reversal of Brexit a 35% probability and a no-deal Brexit at 10%.

EU chief Brexit negotiator Michel Barnier told members of the European Parliament on Wednesday it is now UK's responsibility to ‘tell us what they want for our future relations’. ‘That is the question that needs to be posed to which we expect an answer. It will be a priority even before the question of an extension. Negotiations on Article 50 are finished.'

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