INSIGHTS

Duncan Donald

Fri, Mar 15


Brexit Update: 15.03.19

With the markets buoyed for a potentially explosive night in Brexit on Thursday 14th March, it came and went with little impact. In the Commons, the votes came broadly inline with markets expectation, on both outcome and volume of votes. With Theresa May's Government enforcing a “Three Line Whip” whereby members of her party have to adhere to party policy or face expulsion, she achieved the backing required to stave off another embarrassing result.

There were 5 votes in total last night, with the key outcomes being the House of Commons voting 334 - 85 in favour of no public referendum, naturally as this would suit neither parties' political agenda.  The crucial vote was the 318 -302 in favour of a delay in Brexit to permit further negotiation. Whilst this doesn't necessarily mean Brexit and Article 50 has been extended, this can only be achieved in agreements with the EU’s member states. But, its seems most probable that the March 29th deadline will be pushed back.

Therefore, the questions that needs to be asked is what are we hoping to achieve from this delay, that will be the pressing issue expressed by the EU when they meet with the PM.  They have made their position clear with Michel Barnier, the EU negotiator expressing the current deal is the only one on offer.  So, naturally we are to expect Theresa May to keep re-submitting her deal to Parliament in hopes that it would eventually gain approval.   With her deal just about alive, she will need political strong arming to get it through the House of Commons.  There is talk that Attorney General Geoffrey Cox may be considering amendments to the damning legal advice given on the current incarnation of May’s deal but this is as yet unconfirmed.

The Sterling rally seen in the last week has been due to the outcome of the votes showing that Parliament do not want to exit the EU with no deal and whilst we can say the developments this week have started to close the door on that, the door is certainly not shut.  So whilst Sterling has seen a week of whipsawing, the overwhelming tone has been positive.

But we have to ask the question, have we really achieved that much this week?   Theresa May's public credibility is waning, just as much as it is in her own party. So the weeks and months ahead will be tough for both Prime Minister and country but for now the crisis of No-Deal Brexit is averted.

 

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