GBP has received further support this week. This came in response UK opposition MPs agreeing on a strategy to block PM Johnson from forcing a no-deal Brexit.
Media attention has recently focused on Labour leader Jeremy Corbyn’s plan for a vote of no confidence against Johnson. However, a group of cross-party MPs has now said that it will focus on working to legislate against such a move.
MPs released a joint statement following a meeting called by Corbyn. in it, the MPs said that Corbyn’s vote of no confidence plan remains an option. However, they affirmed that they will instead focus on “the legislative way forward”.
Green MP Caroline Lucas claimed that this is “the most secure way to extend Article 50, to get rid of that 31 October deadline” and stop Johnson “careering towards” a no-deal.
MPs are looking to replicate the legislative process used back in April to require Theresa May to request an extension to Article 50. MP’s will essentially attempt the exact same thing this time around. However, they will first have to succeed in taking control of the parliamentary timetable. They need to do that in order to schedule a debate for the law to be changed, and in time!
One method would be to call an emergency debate in the House of Commons. Emergency debate motions, which usually regard topical matters added to the parliamentary business at short notice, are typically unamendable. This means John Bercow, the Speaker of the House of Commons, would need to rule this one as amendable.
Corbyn has been highly active in arguing the case for a vote of no confidence. His plan outlines that if Johnson loses, Corbyn would be installed as a temporary PM. Then, he would request an extension to Article 50, call a general election and campaign in support of a second referendum.
Lib Dems Against Corbyn Plan
However, Corbyn’s plan has been divisive, at best. And Lib Dem leader Jo Swinson said that her party will not support a plan which includes Corbyn becoming PM, even temporarily. However, Swinson did concede that Corbyn’s plan “remains a last resort, if you like, to be able to enforce the will of Parliament, but the main proposal is going down the legislative route”.
The SNP’s Ian Blackford also attended the cross-party meeting. He claimed the talks had been “positive and productive”. Blackford went on to say:
“Parliament must grasp this opportunity, unite to stop Boris Johnson shutting down democracy – and be ready to use all mechanisms to block a no-deal disaster, including deploying legislation as a priority.”
Farage Offers Election Pact
Meanwhile, Nigel Farage has made an offer to Johnson. Farage’s Brexit Party has been busy establishing itself following success in the MEP elections. Farage, therefore, told Johnson that his party will remove its candidates from running against the Conservatives if Johnson calls an election and campaigns for a no-deal Brexit.
Farage warned the new PM that he will “die politically” if he fails to deliver Brexit on October 31st. He cautioned that enough pressure is mounting to mean that such a failure is likely.
Market Reaction & Technical Perspective
While reports at the moment are lacking concrete details, the general tide seems to be turning against a no-deal. Consequently, GBP is recovering.
The joint statement released by cross-party MPs this week highlights the level of opposition to a no-deal. And, as such, this is increasing the chances that such an outcome could be stopped.
GBPUSD continues to rally off the recent base which formed just above 1.20 support, having tested the bearish channel for low. For now, the move remains corrective and price is fast approaching resistance at the 1.2382 level. This could see the downtrend resume. If we break back above here however, focus will turn to a test of the channel top next and a possible sea change for GBP in the near term. To the downside, 1.20 remains the key level to watch, a break of which will be very bearish indeed for GBP.