This week saw the UK’s Brexit Withdrawal Bill signed and approved by the Queen, making the bill UK law and has ensured that the UK will leave the EU on January 31st. With the original bill being passed by the House of Commons back on January 9th, the bill landed in the House of Lords earlier this week. With the UK confirmed to leave the EU at the end of the month, an EU chief thanked the UK MEP’s in their final meeting on Thursday in Brussels. The upcoming path for the GBP is uncertain after weeks of Bank of England uncertainty, the currency appears to have turned things around. Whilst the same seems to be the case for the euro which saw positive economic data particularly in its German economy – which is a key driver for the Eurozone economy.
Brexit Withdrawal Bill Passed by House of Lords and Signed by the Queen
The Brexit Withdrawal Bill was passed through the House of Commons chamber quickly and quietly on January 9th. Since then, the House of Lords, the unelected upper chamber, approved the legislation this week with added amendments. However, the House of Commons overturned these changes on Wednesday and the House of Lords relented and agreed to accept the legislation without any further tweaks. Following this, the bill was presented to the Queen who signed it into UK law. This ensures that the UK will leave the EU on the 31st January with no exceptions. This was celebrated in Brussels on Thursday after an EU chief thanked the UK MEP’s for their work and the crowd provided a standing ovation. Possibly for the work of the UK representatives or perhaps also a sigh of relief that the Brexit stalling phase appears to be on its way out.
How Will the EU-UK Relationship Change After 31st January?
The EU-UK relationship actually won’t seem that different for the most part, at least at first. The UK and the EU are about to enter an 11-month transition period which will see the UK following most of the EU rules, but it will not have any decision-making power in the body. During this period the UK and EU shall figure out what the future will look like for both economies. This relates to trade, financial services, how security will work between the two – and a whole lot more. Negotiations are expected to begin in late February and the deadline will be in December, leaving little room for stalling.
The next phase will not be easy as both parties enter negotiations. Volatility is expected from both the GBP and EUR in their interlinking exchange rate pairing. The path for both is not clear as of yet, but as negotiations continue, the picture shall become clearer.
If you have an upcoming currency transfer and would like to plan around Brexit or the BoE interest rate decision, feel free to contact me directly, Tom Holian, Using the form below. I look forward to hearing from you.