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Brexit battle goes on

Published: Thursday 14 June 2018

By Adrian Bishop

The volatile Brexit saga between the UK and the European Union (EU) has served up a few more surprises during a series of important votes in the House of Commons, including an unexpected ministerial resignation and a subsequent walkout by Members of Parliament (MPs).

Pound remains steady

The Pound has largely remained steady against major currencies, as markets took into account the government’s victory. The Pound is currently being influenced more by economic data and monetary policy announcements from the UK, Europe and elsewhere across the Globe, although Brexit shocks remain a concern for Sterling strength.

11 votes on House of Lords amendments

Altogether, there were 11 votes of House of Lords amendments during the first session in the House of Commons on Tuesday evening concerning amendments tabled in the House of Lords over the European Union (Withdrawal) Bill.  These included the crucial “meaningful vote” that sought to give MPs a vote over the final Brexit deal.

Increased tensions as Justice Minister resigns

There was frantic activity all day in an effort to win over Brexit rebels. Ahead of the votes, tensions were increased by the surprise resignation of Justice Minister, Phillip Lee, who said he could not support Brexit in its present form and called for another referendum, once the way ahead was clear.

Late talks with the PM – “no deal” strategy?

Prime Minister, Theresa May, held late talks in a bid to placate Tory rebels, who said they were given assurances that their concerns would be addressed when the EU (Withdrawal) Bill returns to the Lords in a few days. As a result, all 11 votes were won by the Government with narrow majorities.

The concessions were thought to include the offer that if Parliament rejected the final Brexit deal, ministers would have seven days to set out a fresh approach. In the case of talks with the EU breaking down, they would have until 30 November to try to strike a new deal.

It does not appear that the government conceded that if there was no deal by 15th February 2019, the House of Commons could set its Brexit strategy.
Euros, passport
Move angers Brexiteers

However, the move angered Brexiteers, who said the government’s strategy for Brexit should not be in the control of MPs.

The Brexit Department raised further doubts over the deal in a statement saying, “We have not, and will not, agree to the House of Commons binding the Government’s hands in the negotiations.”

All eyes on Monday’s amendments

So, confusion now reigns and all eyes will be on the form of the wording of the new amendments when the updated bill returns to the Lords on Monday 18th June.

Devolution debate squeezed

As the 11 votes took six hours to be discussed and decided upon, the subsequent Commons debate on devolution was squeezed to less than half an hour.

Scottish National Party MPs walkout

Angry Scottish National Party (SNP) MPs protested by walking out of Wednesday’s Prime Minister’s Questions (PMQs). In addition, the party’s Westminster leader, Ian Blackford, was banned from the chamber for a day after a row with Speaker, John Bercow.

Westminster leader suspended

Mr Blackford asked for the chamber to sit in private to debate the “power grab” in the EU (Withdrawal) Bill.

The House Speaker, Mr Bercow, said MPs could vote on the request for a private sitting at the end of PMQs - but Mr Blackford was suspended after refusing to sit down and party MPs followed him out.

Little impression on the Pound – for now…

All this frantic political activity had little impression on the Pound. Although it fell from around 1.336 to 1.332 in mid-market rates on Tuesday, it later bounced back to around 1.336.

GBP fell from 1.138 to almost 1.135 versus the Euro. Against the Canadian Dollar, the Pound slipped from around 1.74 to 1.735 during the last 24 hours and was down against the Australian Dollar from around 1.766 to around 1.761.

War is won, but battle resumes next week

David Johnson, Founding Director of Halo Financial, explains, “The fact that the British Government won the crucial Brexit votes in the Commons helped the Pound rally a little against some of its major currency counterparts.

“The market is, of course, concerned about the uncertainty over Brexit; and although this war was won by the government, the battle resumes next week. We will be keeping a close eye on how the Pound fares.”
For more information, infographics and the latest currency insights, visit www.halofinancial.com/news