No Deal Brexit A Growing Concern
4 April, 2019
Tuesday night saw the pound increase after reports Theresa May would meet with Labour leader Jeremy Corbyn, to try and see if cross party talks could save Brexit. As a result we came in yesterday to rates up nearly a cent from the day before.
This rally was short lived as Markit services PMI was released at 9.30am, coming in 2 points lower than expected at 48.9, from last months 51.3. This is a big slump in the services sector, one of the UKs strongest areas, giving a blow to the economy as we look to be heading out the EU door, with a possible no deal scenario. Under 50 shows contraction in the sector, so not only is it slowing down, its shrinking against the expectations of economists. The news left the pound back where it started such a promising rally as European markets opened and stay there for the rest of the trading day.
To add to poor sentiment, the Bank of England’s chief, Mark Carney said in an exclusive interview with Sky News stated the risk of Britain leaving the EU without a deal was now “alarmingly high”. He commented that MP’s, the Prime Minister and the EU all don’t want “no deal” but we are heading into a distinct possibility of ending that way by default.
Yet more drama in the Commons yesterday as MP’s put to the vote whether to hold more indicative votes on Monday – the result a tie, was decided by Speaker of the House John Bercow, who voted with the no’s. Theresa May and Jeremy Corbyn met for over two hours Wednesday afternoon to discuss Brexit with Corbyn stating they were “useful but inconclusive” and Downing St stating they were “constructive”. Meanwhile, MP Nigel Adams resigned over the meeting and Brexit Minister, Chris Heaton Harris also quit as May ruled out a no-deal Brexit as MP’s debated into the night on a Bill which require May to request an extension to Article 50 and prevent a no deal Brexit on the 12th April. MP’s also vetoed rewriting the legislative timetable to allow Yvette Cooper’s bill to delay no deal, effectively showing the lack of trust in Theresa May and meaning she’ll likely need to go back to the EU to request another extension.
And so the saga goes on…. and with no eco-stats of any key note today, it will be Brexit speculation once again to pave the way for sterling.
So as MP’s continue to navigate Brexit like headless chickens and the real possibility still remains we could leave next week without a deal by default, anyone with an upcoming transfer to make might be prudent to speak with one of our consultants today to secure a deal, while Ministers battle to get Britain one.