It’s been an action packed couple of weeks for the UK and the ongoing Brexit negotiations and the pound lost value last night as the chances of no deal increased. UK Prime Minister Theresa May announced that she had applied for an extension of Article 50 until the end of June, however she would not seek a longer extension if her deal doesn’t go through next week.
Quite simply this means that the UK could actually crash out next week, which could put major pressure on sterling exchange rates.
Looking ahead Theresa May will meet EU leaders in Brussels this evening to discuss Brexit. The speaker of the House Mr Bercow is still waiting for substantial change so MPs can vote on the deal next week. I’m going to guess a few changes to the legal text will be made tonight, which will allow the vote next week.
Will the UK leave the EU without a deal?
Going into next week, MPs will be asked a simple question, crash out of the EU or accept the Prime Minister’s Brexit deal. When forced to make a decision I expect the voting pattern will be different in comparison to the last two meaningful votes, however prediction the final outcome is close to impossible.
If a deal is stuck I expect the pound will gain value, where as if MPs vote down the deal I expect the pound could crash as we are one step closer to leaving the EU without a deal. If this was to happen I expect the Prime Minister’s resignation to follow, forcing the UK into further uncertainty.
Bank of England interest rate decision
In other news the Bank of England are set to release their latest interest rate decision today at midday. No change to interest rates is to be expected, however the Governor of the Bank of England, Mark Carney’s speech shortly after should be watched closely. Now that Theresa May has put her cards on the table, this is either a brave bluff or the UK could crash out of the EU in 8 days, therefore I expect Mark Carney could hint that further uncertainty is on the horizon.
If you would like to know more about how Brexit is affecting Pound Sterling exchange rates and how these factors could impact your currency exchange feel free to use the form below to get in touch.
