If Boris Johnson was of the opinion that it would be smooth sailing through to the 31st October Brexit deadline, he would have had a rude awakening.
It’s not Theresa May’s leadership of the Tory Party that brought about the in-party division and her untimely demise.
Ironically, Boris Johnson was one of the catalysts in the Conservative Party implosion that has resulted in the resignation of 2 British Prime Ministers in just a few years.
Brexit is a Pandora’s Box and for this very reason, the in-party implosion was to be expected when considering the events leading up to the EU Referendum itself.
The UK Parliament continues to be of the view that a no-deal departure from the EU should be avoided at all costs.
This very impasse brings into question just how effective either of the candidates in the leadership race will be at delivering Brexit.
While the EU Referendum was not a legally binding one, the majority did speak, all-be-it by a particularly narrow margin.
We continue to debate whether a 2nd Referendum should decide Britain’s fate. It’s no secret that voters are now more knowledgeable on what Brexit involves.
When governments fail to win by a majority and are unable to form a coalition, a 2nd election is not uncommon.
The UK Parliament has continued to fail at delivering a deal for Britain to leave the EU. This should be considered a good enough reason to take it to another vote. The pro-Brexiteers may feel unfairly treated, particularly if the outcome is to remain, but this should be larger than Parliament.
Either way, the reality is that it should be the voters and not the members of Parliament who decide Britain’s fate.
There’s one curveball, as there always is. The EU could decide that certain components of the Brexit deal warrant reviewing.
Brexit and the UK economy
Economic data out of the UK puts to bed the Brexit doomers and gloomers, at least for now.
Retail sales surged in June according to government figures released on Thursday. Wage growth was also on the rise, in spite of disappointing claimant count figures. Throw in inflation at 2% and doubts will begin to creep in on whether the BoE will cut rates. Last week’s GDP numbers had muddied the waters ahead of this week’s stats.
The BoE’s next move does ultimately hinge on Brexit. If Parliament successfully blocks a Johnson no-deal departure, assuming he takes the top job, it would certainly be a positive.
It could get even more interesting if Parliament manages to prevent Johnson from suspending Parliament to deliver Brexit.
If the EU refuses to return to the renegotiating table and simply agrees to give Britain more time to come to terms with the deal that would also be a positive.
One has to say that the longer this drags on, the higher the chance of a 2nd Referendum. There would at least be a snap general election if the 31st October deadline passes…
While the markets tend to dislike uncertainty, particularly when Brexit is concerned, the Pound may embrace this one…
At the time of writing, the Pound was down by 0.24% to $1.25143. The Pound found support from favorable Brexit chatter from the EU this week. There is a long way to go, however, which leaves a downward bias in place…
It wouldn’t take much for the Pound to slide back to $1.23 levels and bring $1.20 back into play…
This article was originally posted on FX Empire
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