Pound poised as Boris misses chance for his Saturday vote

Oct 21, 2019

The pound remains poised today after Saturday’s much-hyped meaningful Brexit vote never happened.

An amendment to the bill was passed just before the vote was supposed to happen which prevented it from going ahead. The so-called Letwin amendment was designed to prevent the approval of the deal until legislation to implement it had been passed, thereby removing the risk of an accidental no-deal. MPs want more time to scrutinize the legal text before voting on it.

The Government will make a second attempt to get a vote on it today, to either approve or oppose the new deal in principal, but it seems likely that John Bercow will reject this (so it might be tomorrow or later in the week). There’s likely to be a flurry of other amendments put forward as well, including remaining in the customs union and adding on a confirmatory vote onto the proposed deal. 

The result of this meant that Boris had to follow the Benn bill and write a letter to the EU requesting a 3-month extension. He sent an unsigned letter requesting the extension and then a second letter explaining why it was a bad idea. The EU will now consider whether to grant this extension and they might take their time to respond to this but are ultimately expected to agree to one over a no-deal exit.

Overall, although the main vote never happened, there were positives from this weekend’s events and the chances of a no-deal Brexit seem to be falling which has given the Pound support. It’s now poised around some key technical levels with the GBP/USD and GBP/EUR trading around 5-month highs.