E.U talking Turkey, or will Brussels sprout objection to an extension?

20 March, 2019

Matthew Boyle

With 9 days to go until the UK is expected to leave the E.U, it is likely that Theresa May in her letter to EU Council President Donald Tusk an extension to the 30th June, in a bid to buy more time to find a way forward.

Whilst the date for this extension request has not been formally confirmed, this is most likely as it is the last day that Britain could remain part of the E.U without taking part in European elections. This move is also suggested to stave off some high-level resignations in the cabinet following anger at the prospect of a long delay. Concerningly though, yesterday Michel Barnier warned that any proposed delay would not be approved without “good reason” and urged people to make “final preparations” for a no-deal divorce. Add to this, the proposed extension Theresa May will submit today may not even make it past the E.U, as all 27 countries as they simply may not agree to it, and so we would be walked into a no-deal Brexit by default. And with the House of Commons speaker John Bercow earlier this week stating that Theresa Mays current deal would not be heard in the commons for a 3rd vote without significant changes, even if we get an extension, a new form of deal would have to be tabled or a way be found to hear the meaningful vote for a 3rd time – one that has been defeated twice by significant margins.

So It looks like the clock may run down on Brexit for the UK, with 9 days to go now after almost 3 years of negotiations and with no real progress. It is a very real possibility that we may have left it simply too late now to get a deal done, and an over-reliance on the E.U to agree to an extension, or changes to a deal now may be dangerously misplaced and could be catastrophic for the UK.

Currency rates remain good at least in the short term so you may like to consider taking the risk of your transfer out, as it seems we may be now staring down a barrel. Even if you are particularly optimistic in this short-time frame perhaps you want to split your risk and look at securing half of your funds in what is such an uncertain and risky market? Mitigating risk in the current conditions would certainly not be a bad strategy!

In terms of Ecostats today we have U.K inflation data at 09.30 this morning, and this afternoon we have data from the US – FOMC economic projections, the FED monetary policy statement and the FED interest rate decision.

Whilst these can, of course, affect rates, all eyes will be on Brexit developments today, as for how this saga will play out in this final countdown.