Brexit Update – Boris Johnson’s Wake-up Call

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On Tuesday, MPs took over the control of agenda and ultimately Parliament. As a result, Wednesday became a pivotal moment in British politics and Johnson’s renewed involvement in the Brexit process.

Despite threats laid out to Tory Party rebels, a reported 21 Tory Party MPs voted against the government.

The victory allowed MPs to introduce legislation to block a no-deal Brexit should the British PM fail to have an agreed plan in place with the EU.

For the newly-appointed British Prime Minister, things went from bad to worse on the day. The government also failed to garner the necessary number of votes to force a general election on 15^th October.

As per the rules under the Fixed Term Parliaments Act, Johnson needed two-thirds of MPs to support his motion. Of the 434 votes needed, the government received just 298 votes.

The result was in stark contrast to the Bill to prevent Britain from leaving the EU without a deal, which was on its way to the House of Lords.

For the Pro-Remainers, getting the Bill through the House of Lords ahead of next week’s suspension of Parliament is critical. Unsurprisingly, the Brexiteers included a slew of amendments in an attempt to slow down the Bill’s passage.

The Court of Session

Following hearings on Tuesday, the Court of Session ruled against the Pro-Remainers on Wednesday. As a result of the ruling, an appeal is scheduled to be heard later today in a further bid to prevent Johnson from suspending Parliament.

Should the appeal fail to prevent a shutdown of Parliament next week, it is in the hands of the House of Lords to pass through the latest Bill in time…

Vote of no-Confidence

Boris Johnson’s attempts at delivering a snap general election just 2-weeks ahead of Brexit failed on Wednesday.

The Opposition Party had been clear on the need for the Bill to prevent a no-deal Brexit to pass before being willing to support a motion for a general election.

With Johnson falling well short of the required vote, the only hope for Johnson is for the House of Lords to send back the bill with amendments and for suspension of Parliament to kick in before the Bill is approved.

Should the Bill be approved in time, the chances of a no-deal departure are removed. It will then be interesting to see whether the British PM calls for a snap general election or if there is a vote of no confidence…

The Pound

While the Pound found strong support on Wednesday, rallying by 1.42%, it has some way to go before it’s out of the danger zone.

While abated, risks of a no-deal Brexit continue to linger. An appeals decision in favor of the Pro-Remainers would certainly give the Pound another much-needed boost.

Blocking a suspension of Parliament would give the House of Lords and Parliament sufficient time to pass through the Bill. Removing the ability to crash out of the EU without a deal extends Brexit until next year.

The Bill does leave the British government in a position, however, where they may not be able to deliver.

With the EU unwilling to renegotiate and Parliament divided, a new deal could prove hard to come by. That could leave Britain in a permanent state of flux.

What would happen should EU member states decline a request for an extension? That would be the end of any attempts at preventing a no-deal Brexit. While it seems far-fetched for the EU to refuse an extension, it only takes one member state…

At the time of writing, the Pound was flat at $1.22516.