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Brexit – What’s next for this Troubled Isle as May Heads to Brussels?

By:
Bob Mason
Published: Dec 13, 2018, 06:17 UTC

It's all eyes on the EU and Theresa May, the chances of a deal laying in the hands of Juncker and Theresa May's peers who could sink May and the GBP.

Brexit fears continue to swirl around the markets

It’s another big day for Theresa May, Britain and ultimately the Pound, with the British PM heading to Brussels to try and renegotiate the hard border conditions of a Brexit deal that was pulled ahead of a doomed parliamentary vote on Tuesday.

The move ultimately led to Wednesday’s vote of no confidence, which ended in favour of the PM, with the vote going 200 to 117 in favour and, while the British PM holds on, the damage has been done.

From the get go, the EU Referendum was toxic for any political party sitting at the helm, with the fallout from the 2016 result starting almost immediately and still ever present 2-years later.

We’ve seen prospective PMs come and go, negotiators call it a day, a majority ruling party end in a coalition and a vote of no confidence. From an EU perspective, the continued troubles on British soil has left Britain with an open hand, weakening their position at the negotiating table. The latest twist however may raise some alarm bells for Juncker and the rest.

British politics is in disarray and nobody wants the once coveted top spot, not particularly surprising, with even outspoken Labour Party leader Jeremy Corbyn holding back from making a move to prise leadership away from the Tories.

So, with Theresa May on the way to Brussels, having spent much of the week meeting with key EU leaders, it all lies in the hands of the EU. The unwillingness to renegotiate could shift once Theresa May spells out the alternative, though talk of a second Referendum could be the Holy Grail for the EU, a doomed deal and prospect of a disorderly exit from the EU likely to, not only bring an end to Theresa May’s political career, but deliver a snap general election, another Referendum possibly being a mandate for both the Tories and the Labour Party.

A full-circle would be victory for the EU and ultimately for the Pound, though domestic political uncertainty and the effects of the last 2-years on the UK economy may be telling on the Pound near-term.

As politicians place the blame of an unfriendly deal on the British Prime Minister’s shoulders, claiming that the deal fails to safe guard the best interests of the British public, one does wonder whether a parliamentary vote against this deal or any amended version does have the best interests of the British public in mind, or if it’s just political gamesmanship.

Only a matter of weeks ago, the prospects of a no-deal Brexit had politicians up in arms…

The best option would surely be to get the best deal possible and then give it to the people of Britain to decide Britain’s fate. Take the deal, leave without a deal or remain. Keeping it out of the hands of parliament may ultimately serve best if the last 2-years is anything to go by.

At the time of writing, the Pound was down 0.10% to $1.2616, with a jittery market likely to weigh on the Pound ahead of any updates from the British PM and ultimately the EU, who will make its final decision behind closed doors and away from the ears of Theresa May.

About the Author

Bob Masonauthor

With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.

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