Pound rallies after May’s Brexit pledge

2.5% surge against dollar on back of trade-deal vote

THE POUND climbed against the dollar, set for its biggest advance since the global financial crisis, as Prime Minister Theresa May said yesterday that Britain would leave the EU’s single market when it exited the EU – putting an end to speculation that London might try to seek a “soft Brexit”.

In a long-awaited speech in which she sought to define the country’s future as a global player that aims to trade freely far beyond Europe, May said the final exit deal would be put to parliament for a vote.

May said she would seek an equal partnership with the EU but that she would not adopt models already used by other countries that have free trade agreements with the bloc.

Her statement that Britain would leave the single market was by far the clearest indication she has ever given of her plans for the future, after months of criticism that she was not being sufficiently transparent.

“I want to be clear: What I am proposing cannot mean membership of the single market,” May told an audience of foreign diplomats and Britain’s own Brexit negotiating team. “Instead, we seek the greatest possible access to it though a new comprehensive, bold and ambitious free trade agreement.

“That agreement may take in elements of current single market arrangements in certain areas,” May said.

Her announcement that the British would put the final Brexit deal to a vote in both houses of parliament comes ahead of a court decision on whether she has the power to start the process of withdrawing without parliamentary approval.

She has said she planned to launch the two-year exit negotiation process by the end of March.

The currency strengthened the most since October 2008 as May made the announcement in a speech laying out the government’s Brexit strategy.

Sterling is rebounding from Monday’s decline, the biggest in a month, after the main substance of May’s speech was reported without the extra detail on the parliamentary vote.

“The fact that Prime Minister Theresa May will put a final Brexit deal to vote in both houses of parliament is positive for sterling,” Athanasios Vamvakidis, a London-based strategist at Bank of America Merrill Lynch, said.

The pound climbed 2.5 percent to $1.2347 as of 12.50pm in London yesterday.

The currency fell to $1.1986 on Monday.

PHOTOS: AP A pedestrian passes a board showing the exchange rates at a money exchange bureau in London on Monday, when the pound fell to a three-month low. It subsequently leapt yesterday after Prime Minister Theresa May made her announcement.

PHOTO: AP Britain’s Prime Minister Theresa May delivers a speech on leaving the EU at Lancaster House in London yesterday.