Dow Jones up as UK Parliament rejects no-deal Brexit
Wall Street rises as Parliament rejects a no-deal Brexit.
The Dow Jones is up as the UK Parliament voted 321-278 against the UK leaving the European Union (EU) without a plan in place. This comes just a day after rejecting another Brexit deal from UK Prime Minister, Theresa May.
Why is the Dow Jones up as Parliament rejects a no-deal Brexit?
The Dow Jones is up after a positive report about US durable goods sales rising in January. Wall Street is also rallying after Boeing share price went up days after an Ethiopian Airlines crash that killed 157 people. Wall Street was likely calmed as Parliament voted to ensure that the UK with leave the EU with an orderly process.
May noted that Parliament has to come up with a resolution to enact Brexit by March 29 or there will be a no-deal exit by default.
‘The legal default in EU and UK law is that the UK will leave without a deal unless something else is agreed. The onus is now on every one of us in this House to find out what that is,’ said May.
Parliament will vote again to possibly extend the Brexit deadline beyond the end of March. May told Parliament that if an agreement isn’t found in a few days, the Brexit delay could drag on for months.
‘Such an extension would undoubtedly require the UK to hold European Parliament elections in May 2019. I do not think that would be the right outcome. But the House needs to face up to the consequences of the decisions it has taken,’ said May.
How will a no-deal Brexit affect US businesses?
A no-deal Brexit will not only affect the UK, but US businesses will be impacted as well. McDonald’s wrote a letter along with UK supermarkets to Parliament in January. The companies warned that the UK leaving the EU without a plan in place will cause food prices to rise and the organisation to ration its food supply.
‘All frozen and chilled storage is already being used and there is very little general warehousing space available,’ wrote McDonald’s in the letter.
The fast-food chain also warned that a no-deal Brexit will disrupt the company’s supply chain in the UK.
‘While we have been working closely with our suppliers on contingency plans it is not possible to mitigate all the risks to our supply chains,’ wrote McDonald's.
UK and US businesses are watching Parliament to see what next step they will take on Brexit.
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