The Prime Minister made history last night, suffering the worst Parliamentary defeat in over a century. Theresa May’s withdrawal agreement was voted down by 230 MPs, a humiliating result. As expected, Jeremy Corbyn, leader of the opposition Labour Party, immediately announced he would push forward a motion of no confidence. The DUP, despite their rebellion against May’s Brexit agreement, have already confirmed they would support her in any confidence vote. As a result, even if Corbyn had full support from his own party, the Liberal Democrats, Scottish National Party and Green Party, he would still need help from Conservative MPs. Such a situation is incredibly hard to envisage and, therefore, his strategy to achieve a general election is futile. It simply serves as a distraction to what the opposition should be doing at the moment – ensuring the government take all the right steps to ensure a better deal is forged. Corbyn has stated that he intends to pursue a motion of no confidence more than once as he believes the best outcome at present would be a Labour government taking the reins. I’m not sure anyone’s informed him that the arithmetic to afford him a majority for this motion simply isn’t there!
The pound staged a ‘sell the rumour, buy the fact’ response to last night’s vote. The currency was sold on nerves prior to the vote then furiously bought following the massive defeat as participants believe this could be the juncture where the EU either cave into further concessions, or, where PM May extends Article 50 and follows through on her latest pledge to begin cross-party discussions. Either way, the risks to GBP are still ever present, the speculators are simply displaying a more optimistic view now it’s clear where Parliament stands on the deal May produced.
Today’s trading session will likely revolve around Brexit discussions and developments. This morning sees UK inflation numbers and this evening will see Parliament vote on Corbyn’s no confidence motion at 7pm.
Written by Viv Savani. 1:00pm, January 16th 2019
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8:34am, February 7th 2019
Pound in focus with Bank of England decision and May/Juncker meeting…