UK Opposition Not Going to Block PM May on Brexit Issue
British PM places Brexit Issue at the Forefront of Parliament Briefings
The House of Lords recently amended Brexit discussions vis-à-vis the House of Commons. Now, Prime Minister Theresa May is working diligently to overturn those amendments to safeguard the rights of all EU citizens residing in the United Kingdom. Further, this will provide parliament with a framework with which to negotiate a disentanglement from the EU. The current Brexit Secretary, David Davis has been urging lawmakers not to hamstring the PM as she tries to negotiate the Brexit minefield. The Brexit bill could pass soon, and if May invokes Article 50 of the Lisbon Treaty momentum will be on her side.
Analysts believe that it is in May’s best interests to wait it out for a while. This would ensure that the bill gets the necessary oversight and feedback. There are currently several issues weighing heavily on Europe, including the Dutch elections and the French elections. Towards the end of the month, there are other issues to be consider such as the celebration of the Treaty of Rome. A European Union (EU) summit has been planned for the Thursday April 6, and this could provide the perfect forum for Brexit guidelines for the European Commission (EC).
What Effect will Invoking Article 50 of the Lisbon Treaty have on Financial Markets?
Traders are split as to how Article 50 of the Lisbon Treaty will affect the financial markets. Fortunately, the financial markets typically price in things like Brexit negotiations, Article 50 and the likely responses of the EC, IMF and ECB. Nonetheless, there are real repercussions associated with Article 50. The GBP/USD currency market faced maximum volatility around the time of the Brexit referendum (June 23, 2016). Since then, the implied volatility has come down sharply. As far as UK housing prices go, there were steep increases with the price of London homes exceeding £1,000 per square foot.
There are dire consequences for the NHS, as some 24,000 healthcare workers could leave the UK because of the Brexit. As far as colleges go, The Times was told that European academics are already leaving the UK en masse. And much the same is true of the Hospitality industry which relies heavily on EU staff. Even within the UK, sentiment is mixed about whether a Brexit is the right decision. Scotland has been an opponent of the Brexit deal and is now thinking of holding another independence referendum. Recall that the previous Scottish independence referendum resulted in a decision to remain part of the UK. Now however, there is less certainty about the outcome of such a vote.
UK Unity at Risk if Scotland Seeks Independence
Sky News reported that Alex Salmond pushed First Minister Nicola Sturgeon to propose a second Scottish Independence Referendum, since Scotland does not want fallout from a bad deal with the UK and EU. The breakup of the UK will certainly send indices, equities, commodities and the GBP reeling. The uncertainty of an independence vote will send the GBP/USD pair to record lows, surpassing the weakness we saw with the 31-year low post the Brexit referendum. The latest news from parliament is that Article 50 will not be triggered until at least March 31, 2017. Meanwhile, PM May is calling Sturgeon’s independence referendum highly divisive. Fortunately, currency traders needn’t factor the independence referendum into account just yet – the date is slated for 2018/19.
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About Brett Chatz
Brett Chatz is a graduate of the University of South Africa, and holds a Bachelor of Commerce degree, with Economics and Strategic management as his major subjects. Nowadays Brett contributes from his vast expertise in online trading for iForexTrader.co.uk.