It was another day full of Brexit-related drama, beginning with Conservative MP Dominic Grieve putting forward an amendment that was aimed at preventing the government from running down the clock to a no-deal Brexit if Theresa May’s withdrawal proposals were defeated. Later, Tory MPs reacted furiously at the Speaker, John Bercow, allowing the debate, with some suggesting that he was no longer neutral on Brexit. A claim which the Speaker strongly denied.
Soon after, MPs voted on the Grieve amendment and the government lost by 308 votes to 297. This effectively forces May to hold a ‘plan B’ vote on what happens next within three days if she loses the Brexit vote next Tuesday 15 January. It is worth highlighting that since May delayed the vote towards the end of last year, there have been no changes to May’s Brexit plan and, given that the original delay was because it was expected to suffer heavy defeat, there is no reason to think this won’t happen next week.
The truth is that the amendment merely forces the government to act quicker than it might have done if May’s bill is defeated. There is reason to think that the government would have acted quickly anyway, but prior to the amendment, May had 21 days to make a statement on what will happen next. Now she has three days. It is difficult to understand exactly why Tory MPs reacted so furiously to something that simply acknowledges the urgency of Brexit negotiations. But politics can be odd like that.
Unemployment in the eurozone hit a 10-year low which is some welcome news after some extremely disappointing data from Germany over the past couple of days. Still, balance of trade figures from the eurozone’s largest economy showed the trade surplus decreased yet again. Stock markets rallied again, as US-China trade talks concluded and investors hope an agreement will be forthcoming. Bloomberg reported that Trump is keen to strike a deal with China to boost stocks which, erm, helped boost stocks.
The latest Federal Open Market Committee meeting minutes were perhaps a little more dovish than expected, with policymakers saying that the Fed can ‘afford to be patient about further policy firming’ and that some members believe there will only be a ‘relatively limited’ amount of hikes. The minutes also showed that the interest rate hike in December came despite some reluctance on the part of some policymakers. It was felt that the lack of inflationary pressures justified keeping rates on hold. Strange, how quickly things can change.
There’s so much going on now that, as ever, is impossible to predict. Don’t leave your money to chance – speak to your Personal Trader today on 020 7898 0541 about how a forward contract can help you lock in the same exchange rate for twelve months.