Pound slips as May delays Brexit vote
CORBYN: GOVERNMENT LOST CONTROL AND IS IN COMPLETE DISARRAY
The pound dropped to its weakest level in almost 20 months and government bonds rallied as British Prime Minister Theresa May said she was stepping up preparations for no Brexit deal.
Sterling fell more than 1.5 per cent against the dollar as May confirmed the vote in Parliament on her Brexit deal will be delayed, without giving a new date. She will try to address lawmakers’ concerns over the Irish border with European Union leaders as she warned no deal would cause short-term economic damage.
Parliament had been scheduled to vote today on the agreement that May reached with the bloc for Britain’s withdrawal, or Brexit — a critical moment in her political career and in the battle over an issue that has gripped British politics for nearly three years. But weeks of bitter criticism and days of parliamentary debate had left no doubt that the plan would be soundly rejected by lawmakers.
“If we went ahead and held the vote tomorrow, the deal would be defeated by a significant margin,” May said in an unscheduled address to Parliament yesterday afternoon. “We will therefore defer the vote scheduled for tomorrow and not proceed to divide the house at this time.”
Some opponents of the deal are eager to stick to the schedule and deliver a resounding defeat to the bill and to May.
“The government has lost control of events and is in complete disarray,” said Jeremy Corbyn, leader of the opposition Labour Party. “It’s been evident for weeks that the prime minister’s deal did not have the confidence of this house, yet she ploughed on regardless, reiterating this is the only deal available.”
The move by May means an EU summit later in the week will be the next focus for markets. “This is very strong riskoff move,” said John Wraith, head of UK macro rates at UBS Group AG.
The pound slid 1.6 per cent to $1.2526, after touching the lowest level since April 2017. Sterling also tumbled 1.6 per cent to 90.84 pence per euro, its weakest since August 29.
The yield on 10-year gilts dropped seven basis points to 1.19 per cent, the lowest since July 20.
We don’t have a functioning government. The government has decided Theresa May’s Brexit deal is so disastrous that it has taken the desperate step of delaying its own vote at the eleventh hour.”
British Prime Minister Theresa May abruptly decided yesterday to pull a parliamentary vote on her Brexit deal, throwing Britain’s plan to leave the European Union up in the air on the eve of the vote, after repeated warnings from lawmakers she faced a rout.
May said her Brexit divorce deal with the European Union is still “the best deal that is negotiable,” as she aimed to win Parliament’s support.
In a stinging statement yesterday to the House of Commons, May reminded lawmakers that any Brexit deal would require compromise.
She then asked whether or not the House of Commons really wanted to deliver Brexit and if it was willing to re-open the political division within the country by challenging the 2016 vote of the British people to leave the bloc.
May’s comments came after she postponed the vote in parliament on her EU divorce deal, acknowledging she would have lost today’s vote by a “significant margin.”
The move thrusts the United Kingdom’s divorce from the European Union into chaos, with possible options including a disorderly Brexit with no deal, another referendum on EU membership or a last minute renegotiation of May’s deal.
The decision to halt the vote came just hours after the EU’s top court ruled that Britain could unilaterally withdraw its decision to leave the bloc on March 29. May’s government called that ruling meaningless because Britain has no intention to halt Brexit. But critics of her plans said it opens options, including delaying the exit for more talks, or calling it off if voters change their minds.
After repeated warnings that the December 11 vote in parliament would humiliate her government as opponents and supporters of Brexit joined in opposition to her deal, May convened a conference call with senior ministers yesterday.
May’s apparent inability to win support for her agreement creates doubt over her own future. If she stays in power, she could seek to get a better deal from the EU at a summit on December 13-14, in the hope of putting it before parliament at a later date.
“We don’t have a functioning government,” opposition Labour Party leader Jeremy Corbyn said. “The government has decided Theresa May’s Brexit deal is so disastrous that it has taken the desperate step of delaying its own vote at the eleventh hour.” Sterling skidded to its weakest level since June, 2017.
Brexit is seen as Britain’s most significant decision since the Second World War. Supporters say it frees Britain to trade more widely with the rest of the world; opponents fear it will divide the West as it grapples with the unconventional presidency of Donald Trump and growing assertiveness from Russia and China.
The ultimate outcome will shape Britain’s $2.8 trillion (Dh10.28 trillion) economy, have far reaching consequences for the unity of the UK.
Jeremy Corbyn | Labour Party leader
Brexit reversed?
Just hours before the reports of a cancelled vote, the EU court ruled that Britain could cancel its official Article 50 notice to leave the bloc without permission from the other EU members and without losing any special privileges.
Foreign Minister Jeremy Hunt called the ruling “irrelevant” because Britain will leave no matter what, when scheduled on March 29. To do otherwise would disrespect the majority that voted to leave in the 2016 referendum, he said.