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Brexit Update – What’s next for British PM Johnson and the Brexiteers?

Bob Mason

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Boris Johnson won his first Parliamentary vote at the 9th time of asking on Tuesday.  MPs voted in the latest Withdrawal Agreement Bill. 329 MPs voted in favor, with 299 voting against.

While the Withdrawal Bill got the nod, Johnson lost his 9th vote out of 10, with MPs voting down the timetable vote.

With the Brexiteers losing control of the schedule uncertainty returns to Britain and what lies ahead.

As the UK Parliament awaits the EU’s approval of the extension request, the markets will need to carefully consider what lies ahead.

The “Brexit Can” continues to get kicked down the road and may well continue into 2020.

While MPs hit pause on Brexit, there was one remarkable outcome from Tuesday’s parliamentary votes.

The British PM delivered the impossible, Boris Johnson managed to glue together a Conservative Party in disarray.

285 Conservative Party MPs voted in favor of the Withdrawal Bill and all 285 members also voted in favor of Johnson’s Brexit schedule.

In contrast, Labour Party Brexiteers rebelled, with 19 voting in favor of the Withdrawal Bill and 10 voting in favor of Johnson’s timetable.

General Election Chatter

Now that the British Prime Minister has lost control of the Brexit timetable, there is a risk of the Withdrawal Agreement Bill being sliced and diced in the coming weeks and even months.

A materially altered Bill could lead to a revote that may ultimately end in the Bill being voted down by MPs at the second time of asking.

Boris Johnson has continued to threaten a snap general election. The Labour Party may have been wiser to have accepted Boris Johnson’s challenge at the first time of asking.

This time around, there’s not just a united Conservative Party. Johnson also managed to deliver a Brexit deal. One that was acceptable to the UK Parliament.

2nd Referendum

Would there need to be a 2nd referendum, when a general election would also allow the electorate to decide the fate of Britain’s membership with the EU?

The Labour Party will be desperate to avoid an election. Not only are they likely to lose, but they may even come in behind the Lib Dems and lose its status as the Opposition Party.

That would mean the end of Corbyn, an outcome that Labour Party rebels would likely welcome.

For those pushing for a 2nd Referendum, there’s also no guarantee that Britain would vote to remain at the 2nd time of asking.

It’s not surprising that most of the Brexit noise has continued to come from the Pro-Remain camp. After all, the Brexiteers are in the driving seat.

The Pound

At the time of writing, the Pound was up by 0.06% to $1.28787. Whilst down from its current week high $1.30125, there’s still plenty of support. The markets have lowered the odds of a no-deal Brexit this week.

Volatility is unlikely to abate, however.

What Lies Ahead?

It’s ultimately going to boil down to whether Boris Johnson can get the necessary support for a general election.

The Labour Party has stated that they are supportive of a general election once a no-deal Brexit option had been removed.

With MPs voting through the Withdrawal Agreement Bill, the Tories can now deliver Brexit with the approved Bill. If the electorate vote in favor of the Tories, Johnson’s Bill stands and Britain parts ways with the EU.

If the Opposition Party pull a rabbit out of the hat, it would likely mean a second referendum.

That doesn’t guarantee that Britain remains within the EU, which suggests that the battle would be between the Tories and the Liberal Democrats.

With so many different scenarios now at play, it’s not surprising that the Pound has eased back.

Expect the Pound to continue to be under the influence of Brexit and UK politics.

Next up is the EU decision on the extension. As things stand, key EU members appear to be in favor of an extension to 31st January. It only takes 1 member, however, to force a 31st October departure. It would be interesting to see how MPs respond. It’s either Johnson’s deal or no deal at all…

This article was originally posted on FX Empire

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