Theresa May, speaking in the House of Commons yesterday, raised the prospect of delaying Article 50 for the first time. The news buoyed the pound to a 21-month high of 1.167 against the euro, as the markets reacted positively to a perceived lower chance of a no deal.
If May’s deal doesn’t get through Parliament on the second round, MPs will then need to vote on whether the UK should leave the EU with or without a deal, with the Prime Minister saying, ‘The United Kingdom will only leave without a deal on 29 March if there is explicit consent in the House for that outcome.’
Should that fail, May will allow a vote on a short extension to Article 50. She did, however, warn against lengthy postponing, saying. ‘An extension beyond the end of June would mean the UK taking part in the European Parliament elections. What kind of message would that send to the more than 17 million people who voted to leave the EU, nearly three years ago now?’
It’s important to note, however, that this is essentially an extension of the problem: it doesn’t mean that the volatility will go away any time soon.
The main news will be the debate in Parliament today on amendments – and we could see significant movement in the pound.