Pound ral­lies after May’s Brexit pledge

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

The Star Early Edition - - INTERNATIONAL -

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.

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