It’s Brexit time again, and the next milestone is upon us. On Tuesday, March 12, British Prime Minister Theresa May will go before Parliament and pitch her latest exit plan. Said to be May’s last chance to get approval for her Brexit initiative of March 29, the fate of the UK is about to be revealed in less than a week.
The latest agreement, that was drafted in Brussels, lays out exactly how the UK will leave the bloc. The “deal” details everything from debt repayments to how UK and EU citizens will be treated while in each other’s territories.
The Irish complication
The deal also stipulates protocols at the border of the EU Republic of Ireland and the UK’s Northern Ireland. Lawmakers outright rejected the previous 585-page treaty, dissatisfied by the border safety net termed the “Irish backstop.” Eurosceptics believe an Irish border control will trap the UK in a customs union with the EU, and many of them fear future conflict. Attorney General Geoffrey Cox has been trying to negotiate better terms, but reports little to no gains so far. He will continue his efforts on Friday, March 15.
If May fails to impress Parliament, it may well lead to a vote on ruling out a no-deal Brexit. In turn, the rejection will lead to a vote on whether the UK should delay leaving the EU. This extension is seen as a foothold for 2nd referendum supporters, especially for those flying Labour colors.
A political eye on GBP
If May’s deal gets approved on Tuesday, expect increased GBP trading volumes to restore some measure of stability. The full effects of Brexit can only be speculated, but confirmation that the ‘no-deal exit’ threat is officially over will go a long way to restoring GBP’s value, if only temporarily.
What will a second rejection mean?
If the Tuesday vote gets rejected, GBP might see 24 hours of very volatile trading conditions, which will likely slow for the Wednesday vote that will decide whether the Brexit deadline should be extended. An extension will pile more pressure on the Conservative Party to support May’s deal. May plans to limit the extension to June at the latest to avoid European Parliament elections. If the 27 countries of the EU do end up approving Britain’s departure on March 29, there’ll be no going back for the UK, and traders will see epic GBP volatility the likes of which nobody has ever seen.
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