The pound is stronger this morning on reports that the EU would be willing to grant the UK a Brexit extension. A leaked European draft resolution suggested that member states would back another extension to the Brexit deadline if there was a clear purpose, for example to avoid a no-deal scenario, to hold a referendum or to call a general election. The document also confirms the stance that any deal with the UK would have to involve an Irish backstop.
There have also been suggestions that the DUP may be softening their stance, due to reports that they have agreed that Northern Ireland could abide by some EU laws in order to avoid the controversial backstop. However, whether the EU agree to this approach or not remains to be seen.
Sterling hovered near recent highs yesterday afternoon as the Brexit saga continues. Labour has urged the government to recall Parliament in order to discuss the implications of a no-deal Brexit. The ‘Yellowhammer’ document, which the government was forced to publish, described implications such as fresh food shortages, price rises for food and fuel and disruption to medicines and medical supplies. The Labour Party have said that Parliament’s role is now “more important than ever.”
