After MPs narrowly voted in favour of the amendment tabled by the senior Conservative Graham Brady, yesterday was yet another hectic day of Brexit-related news. MEPs sat down to debate Brexit, with the European Union’s chief negotiator, Michel Barnier, grabbing the headlines. He said that the withdrawal agreement would not be renegotiated – despite what Theresa May and other members of the Commons would have us believe – and that voting against a no-deal Brexit will not necessarily prevent it from happening.
It is difficult to overstate how incredible these past two years have been. Securing an agreement between the UK and EU has proved difficult enough – the backstop that has been put in place is an essential part of the agreement, as it forms part of a solution to the Irish border issue. Getting rid of the backstop does not seem like a viable option at the moment, but it is important to remember that it never has been really.
Let us also remember that the Prime Minister has repeatedly insisted that her deal was the only deal on the table, that if MPs wanted to avoid the risk of a no-deal Brexit, then they must support her plans. Now that the Commons has overwhelmingly rejected those plans, her government supported an amendment that essentially changed her plan. As we learned on Tuesday night, that has now been passed. May is now tasked with convincing the EU to agree to a different plan in two weeks.
Even if she were successful – and EU leaders agreed to get rid of the backstop – May would then have to present that new agreement to Parliament and hope that would win support from a Commons majority. All things considered, it does seem reasonable for Juncker to say that the no-deal Brexit risk has increased. There are now 57 days until Brexit.
Yesterday, we also learned that a High Court judge has ruled that Barclays can shift €190 billion of assets to its Irish division because it ‘cannot wait any longer’ to see whether there will be a no-deal Brexit. The move comes following warnings from the Director General of the CBI, Carolyn Fairbairn, that until MPs can agree a solution to the Brexit crisis, ‘the threat of no deal will continue to drain money from the UK’.
Of course, we do not know what is going to happen over the course of the next 57 days and beyond and neither does anyone else. One thing is clear: if the UK withdraws from the EU without securing a deal, the value of the pound will be highly likely to plummet. Such moves have the potential to be devastating; we are not scaremongering – what seemed highly unlikely even a week ago looks increasingly possible. Speak to your Personal Trader on 020 7898 0541 to find out how to use a forward contract to lock in the exchange rate now.