Parliament to grater take control over Brexit conclusion
26 March, 2019
As March comes to its end, so too does the 2 year stop clock for Article 50. With data few and far between at this time of the month, the focus is fully on the last minute developments on Brexit which are now moving at an increasing pace. Having agreed to conditional extensions with the EU last week, Theresa May now seeks to fulfil these conditions in order to determine the next path. The EU agreed to an extension to May 22nd if the government could get the current deal through parliament this week, something which is looking less likely by the day.
John Bercow has already advised that the deal needs to see substantial changes before it can even be brought before the house again, with Theresa May currently needing around 150 MP’s to change their vote. During her speech in the House of Commons yesterday, Theresa May conceded that as things stand there simply is not the support for her deal to be voted on for a 3rd time, and so proceedings moved on to a number of amendments to be voted on last night to see whether this may change anything at the last minute. The key shift from these votes is that the government has now lost control of the house with regards to the next direction of Brexit.
As things stand the UK will leave the EU without a deal on April 12th unless a new path is unilaterally agreed with the EU, and the direction of this path could well be indicated tomorrow when indicative votes will be held to see where there may be the greatest majority for a successful option. There are 7 potential options on the table that could be elected for voting on as follows:
• 1. Theresa May’s Brexit deal
• 2. No-deal Brexit
• 3. Canada-style free trade agreement
• 4. A customs union
• 5. Joining the single market
• 6. A second referendum
• 7. Revoke Article 50
If any of these options proved popular with parliament and a clear majority evident, the government will then likely pursue this option to negotiate with the EU before Aril 12th but does not make any guarantees with votes only being advisory. It is also still unclear just yet whether these votes will be completely free votes or whether MP’s will be led to vote with their party.
Currency markets have settled in the last few weeks in a 2-3% range whilst we await further clarity on where Brexit goes from here. Within this range, however, prices are incredibly volatile as traders continue to second guess the probabilities of where the UK, and indeed exchange rates could be this time next month. These markets are notoriously difficult to trade in, and can often be managed well with tools such as LIMIT and STOP LOSS orders, and even forward contracts. If you have an up and coming exchange to make and are wondering how best to proceed, contact your currency consultant today to see what options might best suit you to help manage the very real risks that lie ahead.