Prime Minister Theresa May will try and persuade MP’s for a third a time to back her Brexit deal. A vote is expected on the 20th March after MP’s voted yesterday to ask the EU to delay Brexit beyond the current deadline date of the 29th March.
We now find ourselves in a situation, that if a deal cannot be reached, a lengthy extension of potentially two years could be seen. Not something anyone would relish……
There is a real impatience in Europe and European Council President Donald Tusk has said EU leaders could be open to lengthy extension “if the UK finds it necessary to rethink its Brexit strategy”
We find ourselves heading into what could be an extremely volatile week for the pound. If Theresa May can get a deal through, which is still a possibility, then I would expect some strong sterling gains for the pound – a move towards 1.20 could be seen. If she cant, and we face the potential of another two years of uncertainty, then the pound could fall, and heavily in my view. The lengthy extension is a scenario that no one wants and I for one hope she can convince MP’s that her deal is the best option.
If she can get the deal passed before the 29th then Mrs May could ask the EU to delay Brexit until the 30th June. Alternatively there could be a much longer delay and require the UK to take part in elections for the European parliament and a potential UK general election. This uncertainty would, in my view, cause the pound to fall quite significantly from its current levels.
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