Today is the day we have all been waiting for since…well, 10 December 2018, when Theresa May delayed the initial Parliament vote on her Brexit deal. Back then, the justification for the delay was that May would have lost the vote by a large margin, but very little has happened since then to think tonight will produce a different result. But you never know. It is also very difficult to know exactly what will happen if the bill is defeated, but there are seven possible paths:
- May brings the deal back to MPs, perhaps with some minor tweaks
- May resigns immediately
- Tory backbenchers depose May and then try to negotiate a deal
- May calls a general election
- Labour tries to trigger a general election
- A second referendum becomes a very real possibility
- No deal
The day began with Liam Fox, the International Trade Secretary, conceding that while it wasn’t impossible for the government to win the vote, it was unlikely. Later, No 10 released an exchange of letters between May, Donald Tusk and Jean-Claude Juncker. The contents of the letters showed nothing new, although Tusk and Juncker do emphasise that they are serious about finding technical solutions to the Irish border issue. The DUP responded by saying that its concerns about the backstop were heightened as a result of the letters, which is probably the exact opposite of what May wanted to achieve by publishing them.
May went on to deliver a speech in Stoke-on-Trent, where she said that Brexit could be halted if her deal gets voted down. The Prime Minister warned that Parliament is more likely to block Brexit than let the UK leave without a deal. Quite what evidence she has for that is unknown, but she was obviously trying every trick in the book to persuade MPs to support her bill. We will find out if her ploys have worked later tonight. Meanwhile, Gareth Johnson resigned as a whip, saying he could not support the government’s position on Brexit.
Industrial production in the eurozone fell to its lowest mark since February 2016 in November, in another sign that the global economy is slowing. These are worrying times for the eurozone, especially given that recent data from France, Germany and Italy suggests the eurozone’s economy could head into a recession in 2019.
Today’s highlight is clearly the Parliamentary vote on the Brexit deal that takes place at 7pm. Ministers have spent all day pleading with MPs to back Theresa May’s deal, but the outlook does not look good and it is widely expected the bill will be heavily defeated. We could see some significant sterling volatility as a result. If it is defeated, it remains to be seen what will happen next, with a wide variety of possible outcomes, including a second referendum, a no-deal Brexit and a renegotiation of the terms of the UK’s withdrawal.
If you’re making any purchases in the upcoming period, do not leave it to chance – speak to your Personal Trader on 0207 898 0541 about locking in an exchange rate with a forward contract.