Theresa May proposed no new approach nor measures in an answer to Parliament's rejection of her Withdrawal Bill last week that was billed as Plan B, but in fact looked like a lightly tweaked Plan A. After a signal that a period of consultation that filled her diary with a busy timetable of meetings across party lines is over, the chair of Parliament’s Brexit committee, Labour’s Hilary Benn, noted that whilst “her door may have been open, her mind has remained closed”. A pledge to be “more flexible” over the matter of the ‘backstop’ mechanism proposed for Northern Ireland is thereby being met coolly. After all, Theresa May continues to rule-out a ‘no-deal’ form of Brexit whilst indicating that, in her view, the EU is unlikely to agree to extend the Article 50 ‘negotiating period’ that determines when Britain’s EU exit becomes official. Unsurprisingly, the only acknowledgement given during the Prime Minister’s appearance in the House of Commons to the notion of a further referendum was to note that in her view it would strengthen any moves towards a UK break up whilst damaging respect for democracy. Also as expected, the Prime Minister envisaged a new round of talks with the EU ahead, though Brussels has made it clear it won’t renegotiate the deal, even if the bloc’s leaders are prepared to provide quasi-legal reassurances that transitional measures, like the solution for Northern Ireland, will only ever be temporary. Still, a recent decline in actual and ‘implied’ sterling volatility together with relative cross-asset calm in narrow ranges whilst May delivered ‘Plan B’ point to a market that had already made up its mind before she started. With the government’s ‘alternative approach’ in hand, the focus remains very much on the 29th January when Parliament is set to vote on the Withdrawal Bill again.
StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.