Brexit, the Pound and the Return of Nigel Farage

The Brexit Party gives Theresa May and Jeremy Corbyn reason to continue talks and deliver but can they deliver?
Bob Mason
Silvanute

It’s no secret that British Prime Minister Theresa May wanted to wrap up Brexit ahead of this month’s EU elections.

What was perhaps less apparent was one of the reasons behind the urgency that led to 3 consecutive failed votes.

According to the latest polls for the EU elections, Nigel Farage’s Brexit Party would win 34% of the vote. That’s well ahead of a Labour Party 21% and a Conservative Party 11%.

In a bizarre twist of fate, Brexit has, not only brought the two parties to the negotiating table, in a bid to deliver Brexit but has also delivered a political party that could ultimately wreak havoc on an already rocky political foundation.

Few would argue against the fact that Brexit has become a political poison chalice.

As Theresa May and Jeremy Corbyn return to the Brexit negotiating table this week, the tone appears to have shifted. After weeks of wrangling, it looks as though both sides have found common ground.

Theresa May has already announced that a 4th vote is on its way to ensure that Britain leaves the EU ahead of the summer recess. The 4th vote is due to take place in the week of 3rd June.

With the EU elections taking place between 23rd and 26th May, Nicolas Farage could take the seats on offer.

While the EU has managed to calm the anti-EU sentiment that led to the rise of the populist parties, it’s been a different story for Britain.

Interestingly, Farage’s rapid rise to the top does raise questions on where Britain stands on Brexit.

Of greater interest, however, will be whether the British PM acknowledges a protest vote against Brexit.

The local elections were dire, the EU elections are pointing towards an even worse outcome for the Tories.

Would it be just for Brexit to walk out of the EU without one final referendum?

After all, voters are now more aware of the EU and what Brexit could mean for Britain. While a 2nd referendum would no doubt bring about the return of the scaremongerers, voter awareness should and would likely lead to a more reflective vote.

The Rest of the Week

The markets will be looking for Theresa May and Jeremy Corbyn to make progress on Brexit talks. There is very little time between now and the EU elections and the week of 3rd June.

We have seen the Pound bounce around on Brexit news, but while bouncing around, the general path has been southerly.

A deal that keeps Britain within the customs union defies the very principle of leaving the EU.  On the positive, however, it would likely be a positive for the Pound.

At the time of writing, the Pound was up by 0.08% to $1.29135. Hopes of a compromise between May and Corbyn have provided the much-needed support. It’s not a done deal, however, as news reports indicate that the Opposition Party leader continues to play hardball.

It’s all news for the Pound, with stats due out of the UK for the rest of the week. Expect the news wires to continue to provide direction in the coming days.

If the two main parties want to survive, there’s going to need to be a deal that, not only passes through parliament but is also acceptable to the EU.

 

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