Home » Currency Note » Currency Note » Meaningful vote delayed by government

Michael Gove was 100% wrong when he told BBC Radio 4’s Today programme that the meaningful vote was ‘definitely, 100%’ going to happen. Around midday, reports came through that the Brexit vote was going to be pulled, although we had to wait until shortly after 3:30pm before there was official confirmation. The pound weakened sharply against the euro and dollar following the reports and continued dropped as May was speaking and directly afterwards. It fell to a 20-month low against the dollar and an 18-month low against the euro. It appears that the reason for the delay is that May would have lost the vote by a large margin.

The government’s decision was strongly condemned by John Bercow, the speaker, while the Lib Dem leader, Vince Cable, said his party will back Labour if it calls a vote of no confidence. This echoed remarks made by the SNP leader, Nicola Sturgeon. Somewhat remarkably, the prime minister refused to confirm when the meaningful vote will be held, although she did hint that it could be in January. It is worth bearing in mind that the EU Withdrawal Act says that May must make a statement if there is no deal in place by 21 January.

A cynical view of the lack of commitment might be that May is leaving the date of the vote until the last possible moment, so MPs will be left with a choice to back the plan or risk a no-deal Brexit. The lack of certainty right now is truly staggering. Plans seem to be changing right, left and centre and now that the meaningful vote has been delayed, there seems little need to extend our opening hours. However, if the demand for guidance is there and you want to call in, we’ll stay open for as long as necessary.

Given the political events of the day, it is hardly surprising that economic data was not given the attention it ordinarily would receive. The highlights were that the UK trade deficit widened, manufacturing and industrial production were extremely disappointing, construction orders contracted by 30.7% and the year-on-year GDP figure for October came in below expectations at 1.5%.

It is fair to say that yesterday was a bit of a wild start to the week, especially when we consider that as well as the Brexit-related news, Donald Trump also described the hush money payments made by his former lawyer, Michael Cohen, as a ‘simple, private, transaction’. He then offered a caveat, presumably to cover all bases.

Today we will undoubtedly get further reaction to the meaningful vote delay, as well as some economic data. In the UK, we will see the claimant count change for November, as well as the unemployment rate and average earnings for October. We will see the ZEW economic sentiment indices for December from Germany and the eurozone. And then tonight at 7pm, we will NOT have a meaningful vote.

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