Brexit update – time to vote again?
After the events of last week, the UK still faces an impossible situation, but the clock is ticking down to the March deadline.
The UK is hurtling towards its exit date with the EU, but no one seems to be in charge. By 21 January, the government must present its withdrawal agreement to Parliament for a vote. If it does not, then MPs will take over the process, which may well make ‘no deal’ less likely (since there is no majority for it in Parliament). This suggests a delay to Article 50, if not its complete revocation.
At present, the maths in Parliament point towards a three-way split – 119 MPs in favour of ‘no deal’, 220 favouring Prime Minister Theresa May’s deal, and 300 pro-remain (though their task is complicated as many of them represent Leave-voting areas).
No one side has a majority, which does not augur well for progress on this front. May’s victory last week in the no confidence vote leaves her immune to another no confidence vote by her party for 12 months. This does give her plenty of room for manoeuvre, in a sense, since she can now move towards a second referendum without fear of a fresh challenge from those behind her.
But this will require cross-party support. And Labour is still happy to sit back and watch the Tory party implode. Polling over the weekend saw two polls, one with a small Tory lead and one with a small Labour ascendancy. But not enough to make a Labour win, or even a rainbow coalition, a certainty. A no confidence vote is possible, but even then, a Labour win is not guaranteed, and if they do, they have 14 days to form a government, or an election will have to be called.
Unfortunately for Labour, to beat the Conservative’s 317 MPs, they would need to cobble together a coalition of Labour, SNP, Lib Dems, Plaid Cymru, the Green Party and the DUP (257 + 35 + 11 + 4 + 1 + the DUP’s 10 = 318). Such a coalition would be unlikely to hold together for long, especially since the Lib Dems and SNP are wholly against Brexit.
As has been the case since the referendum, no one calling for a second vote has exactly defined what the vote would be about. Last week’s decision by the European Court of Justice (ECJ) suggests the UK could revoke Article 50 and go back to the situation on the morning on 23 June, with its membership, but more crucially its opt-outs, still intact. This is a huge boost to the Remain cause, as they can argue that we can merely pretend the last two years were a dream, and that the UK can go on as it would have done had Remain won the first time around.
We could therefore have a three-way vote, with no deal, May’s deal and Remain on the ballot paper. This might split the Leave vote and leave Remain with a victory at the last minute. But such a possible outcome still needs Parliament to pass the legislation for another vote, and that took seven months last time when the Conservatives had a clear majority. While the Brexit side is now split no deal/May’s deal, Remain may split between second referendum/Article 50 suspension or revocation.
The clock is ticking, and in time a clear caucus for one decision or another may emerge. But time is running out.
IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.
The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.
No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. Please see important Research Disclaimer.
Please also note that the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.
European Central Bank meeting
Learn about how the ECB meeting affects interest rates and price stability ahead of the next announcement.
- How might the next meeting affect the markets?
- What are the key rate decisions to watch?
- Why is the Governing Council announcement important for traders?
Live prices on most popular markets
- Forex
- Shares
- Indices
See more forex live prices
See more shares live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
See more indices live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.