Pound poised as May tries third time lucky on her vote

Mar 29, 2019

The Pound trades at relatively subdued levels but is poised ahead of May’s third attempt to get her Brexit divorce agreement through Parliament.

After no majorities were found from the indicative votes held in Parliament on Wednesday night – an attempt to break the Brexit impasse – the Brexit uncertainty has increased further.  As a result, the Pound has lost some ground over the past couple of days.

The Speaker of the House  (Bercow) had previously said that a third meaningful vote from May was not possible unless there were changes to it. To overcome this, and to give her more chance, May has removed the political declaration about future trade from the vote. As things stand – with the DUP still against the deal – she is expected to lose this vote again but it should be a lot closer than the second time around with a wave of Brexiteers moving to vote in favour of it (over risking no Brexit at all).

If she loses the vote, then the exit date of the 12th April will be in place and Parliament will need to let the EU know their next plans (with a long extension the most likely scenario). The other options are leaving without a deal on that date (odds have increased), announcing a general election, a second referendum… or possibly a 4th meaningful vote (if the third one is extremely tight). May has agreed to step down if her deal gets ratified, but what will she do if she loses? Any resignation from her (if not from deal passing) would create further uncertainty.

All eyes will be closely watching the DUP today, and the rumour mill is in full swing, with reports that they might be making an important announcement this afternoon. Will they be supporting the deal or could they be announcing the end of their confidence and supply agreement with the Tories?  Watch this space.

As a result, the Pound trades at a 1-week low against both the Euro and USD.

The results for today’s vote will be around 2.30-3pm.