Sterling exchange rates have rallied overnight as it appears that concessions could be made between the UK and EU in the hope to get Prime Minister Theresa May’s deal through parliament.
MP’s will vote this evening on Mrs May’s Brexit deal after “legally binding” changes to it following last-minute talks with the EU in Strasbourg. Labour party members have already said they will vote it down and a number of Tory Brexiteers are taking legal advice on the changes.
What has the PM agreed?
Two key amendments have come from the PM’s meeting with EU officials. The first is a “joint legally binding instrument” on the withdrawal agreement which the UK could use should the EU try to keep the UK tied into the Irish backstop indefinitely. And the second is a joint statement about the UK and EU’s future relationship with a commitment to replace the backstop with an alternative by December 2020.
A key view on these amendments will be taken by Attorney General Geoffrey Cox this morning, reportedly around 11:30. His views could be an increasingly important factor as to how MP’s will vote in the commons later today. Many MP’s fear the backstop would keep the UK in a customs arrangement with the EU indefinitely and this is still very much the sticking point to get her vote passed.
Why has the pound rallied?
It would appear the market believes there is a real chance that Theresa May, with these concessions in place, could get her deal through parliament today. Key members of the EU have said this is the final deal. President of the European Commission Jean-Claude Juncker was quoted as saying:
“In politics sometimes you get a second chance. It is what we do with that second chance that counts. There will be no third chance.”
It really does appear as though this is a 50-50 vote, pass it or face a ‘no-deal’. I’m hopeful she will get this vote through and we may well see some further positive movement for the pound. We can but hope…….
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