As five days of debates come to an end, the market is bracing itself for a “final, meaningful vote” in Parliament today on Theresa May’s Brexit deal due to take place at 19:00 GMT.
Negotiations have been fraught and even as May pleads with politicians to support her or risk “letting the British people down,” there is a significant level of uncertainty surrounding the deal which stands a high chance of being rejected by parliament.
Speaking in the House of Commons last night, May said to MP’s of the deal:
“It is not perfect but when the history books are written, people will look at the decision of this House and ask, ‘Did we deliver on the country’s vote to leave the EU, did we safeguard our economy, security or union, or did we let the British people down?'”
May also used last night’s speech as a final chance to reassure MPs over the Northern Irish “backstop” issue which has been such a key sticking point during her campaign to deliver Brexit.
On this issue, May once again pointed to the extra reassurances she gathered in Brussels when the parliamentary vote was suspended before Christmas, telling MPs that interim customs arrangements would only be temporary and would last for the “shortest possible period.”
May Facing Tough Opposition
However, it seems that a large number of MPs remain staunchly opposed to the deal. Reportedly, there are around 100 Conservative Party MPs along with 10 DUP MPs who could join Labour and other elements in voting against the deal.
If the deal is voted down in Parliament today, May will then have three days to return an amended version to Parliament and try again. If a second attempt fails, some senior conservative MPs have proposed a “European Union Withdrawal Number 2 Bill” which would allow ministers a further three weeks to arrange another deal and pass it through Parliament.
However, if this third attempt is unsuccessful, MPs propose that the responsibility for agreeing on a compromise deal goes to the Liaison Committee which is comprised of the chair people from all the Commons select committees, including those from opposition parties.
A Second Referendum?
One other outcome which might occur is that of a second referendum. A group of anti-Brexit MPs from across the political spectrum has proposed new legislation that would allow for another referendum, this time asking the British public whether it wants to remain in the EU or leave under May’s proposed deal. In such circumstances, the current leaving date of March 29th would have to be extended, meaning that the UK would remain in the EU for longer.
However, unless such new legislation is passed, if no Brexit deals are agreed to in Parliament, the UK will leave the EU on March 29th without a deal.
GBPUSD continues to trade within the bearish channel which has framed price action over the last seven months. Following a false break of the 1.2482 low, price has since turned higher and is now sitting just below the bearish channel resistance. For now, focus remains on further downside unless we see a break of the channel top which would bring the 1.3304 high into view, which is a key medium-term pivot for price.