Home » Currency Note » Currency Note » MPs vote to replace Irish backstop

Reaction to last night’s result is certainly mixed, with the more conservative papers lauding Theresa May’s achievements and the fact she managed to unite her party, while others appear concerned by the latest developments. It is difficult to know exactly what to make of the vote and what it means for the Brexit negotiations, but the Prime Minister has effectively given in to Brexiters by having the government support the Brady amendment; one which promises to replace the Irish backstop with not-yet-specified ‘alternative arrangements’.

However – and this could well prove to be the biggest fly in the ointment – the EU has said that no renegotiation of the withdrawal agreement is possible. Mere minutes after the Commons supported the plans to replace the Irish backstop, a spokesman for Donald Tusk, said that no changes to the deal already agreed would be permitted. It is worth making this point: Theresa May has already come to an agreement with the EU. As far as they’re concerned, the negotiations are concluded – at least, that’s what they’re saying.

Following the vote, sterling fell sharply against the dollar, as investors try to gauge precisely what the outcome means. The pound has been on an upward curve since MPs rejected the original withdrawal agreement, but now that May has been given the scope to negotiate a new deal, everything is up in the air again. Sterling has actually retraced some of last night’s losses but, yet again, we could be in for an extended period of volatility. Anything could happen at the moment, but it is possible the markets won’t be quite so confident that there will not be a no-deal Brexit.

Make sure you protect your money against any future volatility. A forward contract locks in your exchange rate for up to twelve months, so your budget is ring-fenced, no matter what the markets do. Call your Personal Trader today on 020 7898 0541 to find out more.

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