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March

Theresa May seeks Brexit delay

Published: Wednesday 20 March 2019

UK Prime Minister, Theresa May, is requesting an extension of Article 50 from 29th March to at least 30th June, 2019. But at what economic and political costs for Britain?

Following the news, the Pound rose from the daily low of 1.324 Interbank rates against the US Dollar to around 1.327. Earlier in the day, it briefly hit 1.33 on optimism that Brexit could see a longer term delay.

It was a similar tale against the Euro, with the Pound rising from the daily low of 1.167 to almost 1.169 at close of business, but at less than the daily peak of 1.17.

The developments follow Monday’s surprise ruling from House of Commons Speaker, John Bercow, that parliamentary convention ruled out a third "meaningful vote" on "substantially the same" motion on Mrs May’s Brexit deal that MPs had previously rejected.

Dan Barker, Head of Private Client at foreign exchange specialist, Halo Financial, says, “At the moment, we don’t know how long the requested hiatus will be. Mrs. May wants a short delay to get her deal over the line, but the European Union may seek a longer extension, which could mean extra costs for the UK and a requirement for it to hold European elections in May.  If the EU agrees an extension, it may be enough to persuade the Speaker that the terms of the PMs deal are substantially different and could be voted upon again.

“For those making Sterling exchanges at the moment, it really is a case of watching the market and keeping a close eye on the news, as well as obtaining guidance on how this might affect your specific circumstances from a currency specialist.”

A spokesperson for Theresa May says, “The Prime Minister will be writing to Donald Tusk, the President of the European Council, before the European Council begins, in relation to an extension.”
No other details were confirmed about the delay or the purpose behind it.

At a press conference on Tuesday, the EU’s chief Brexit negotiator, Michel Barnier, said that the EU would not grant an extension unless a concrete plan was in place.

The House of Commons also voted in favour of an extension of the Article 50 period. If Prime Minister May requests such an extension before the European Council on Thursday, it will be for the 27 Leaders to assess the reason and the usefulness for an extension. EU Leaders will need a concrete plan from the UK in order to be able to make an informed decision.”
 
The main questions under consideration are:
  •        Does an extension increase the chances for the ratification of the Withdrawal Agreement?
  •        Will the UK request an extension because it wants a bit more time to rework the Political Declaration?
He concludes, “The European Council will need to assess what is in the best interest of the EU. Extending the uncertainty without a clear plan would add to the economic cost for our businesses, but could also incur a political cost for the EU.
 
“It is for the British Government and Parliament to decide very quickly what the UK wants to do next.”
Theresa May is attending an EU summit in Brussels on Thursday 21st March to discuss the Brexit options. All 27 EU Members have to agree to any extension.

Good news for British expat pensioner healthcare

Meanwhile, there was good news for the 180,000 British pensioners in the European Union, after the UK agreed to pay health costs for up to 12 months in the event of a no-deal.

Health Minister, Stephen Hammond, says the £500 million measure is designed to cover all treatments that start before exit day, for up to 12 months afterwards.

 “The UK government has committed to fund healthcare for UK nationals (and others for whom the UK is responsible) who have applied for, or are undergoing, treatments in the EU prior to and on exit day, for up to one year, to protect the most vulnerable.”

The commitment still requires the UK to reach agreement with each member state and discussions are ongoing about this.

If British nationals living abroad “face changes in how they can access healthcare” they may return to live in the UK on a property settled basis and use the NHS, says Mr. Hammond.

Pensioners who have already signed up to the S1 reciprocal care payment arrangements and who are “resident in EU member states” on exit day “can use NHS services in England without charge when on a temporary visit to England”.

More information is available on the UK Parliament website.

If you have currency concerns in the current market, get in touch.