The pound surged on Tuesday after the UK Supreme Court ruled that prime minister Boris Johnson’s five-week suspension of parliament was unlawful.
In a unanimous ruling, the court said that Johnson’s advice to the Queen, which prompted the suspension of parliament, was unlawful because it had the effect of “frustrating or preventing the ability of parliament to carry out its constitutional functions without reasonable justification.”
The suspension itself — known as prorogation — was also therefore unlawful and void, the court said.
Parliament can therefore be recalled immediately, meaning that MPs now have extra time to prevent a no-deal Brexit.
“The pound has spiked higher after the Supreme Court delivered a shocking blow to the government and the prime minister,” said Neil Wilson, chief market analyst at Markets.com, in a note.
The decision of the court is one of the most significant constitutional rulings made in the UK in recent decades.
The court said that the decision to prorogue parliament was “extreme” and that no justification had been provided to the court for taking this action.
Because the advice given to the Queen was unlawful, and because the order which led to the prorogation was unlawful, the prorogation itself “was also void and of no effect,” the court ruled.
“Parliament has not been prorogued. This is the unanimous judgment of all 11 justices,” the court said.
In a statement, speaker of the House of Commons John Bercow said that he welcomed the judgment.
“The judges have rejected the government’s claim that closing down parliament for five weeks was merely standard practice to allow for a new Queen's Speech,” he said.
“In reaching their conclusion, they have vindicated the right and duty of parliament to meet at this crucial time to scrutinise the executive and hold ministers to account.”
Parliament was previously due to return on 14 October, just two weeks before the 31 October Brexit deadline.
“Fundamentally it’s hard to see how this gets the UK and EU any closer to a deal that will be approved by MPs, but it does really deliver a massive blow to Boris Johnson,” said Wilson.
Though the currency has weakened significantly since the June 2016 Brexit referendum, it has climbed in recent weeks after Johnson experienced a number of stunning defeats in parliament.
Ahead of the suspension of parliament earlier this month, a group of rebel MPs, including many from Johnson’s own Conservative party, passed a law to prevent a no-deal Brexit.
Over the course of three days, the Supreme Court heard two appeals, one from Brexit campaigner and businesswoman Gina Miller, and another from the government.
Miller was appealing against a ruling in the English High Court, which found that Johnson’s suspension was a “purely political” matter and not something that should be adjudicated in the courts.
Johnson’s government, meanwhile, was appealing against a ruling from the Scottish Court of Session, whose judges unanimously found that the prorogation was unlawful.