Labour Leader Jeremy Corbyn has in some eyes finally decided to call for a General Election in order to break the current stalemate amongst MP’s in the House of Commons. However Mr Corbyn has pointed out that Labour alone do not have enough votes to trigger a no confidence vote in Mrs May’s Government and that there will need to be cross party support in order to trigger a vote.
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When challenged further on this Mr Corbyn simply suggested that once he knows he can win the vote it will be triggered. The DUP in Northern Ireland have already confirmed they will back a challenge against Theresa May from the opposition and only a brave Conservative MP is going to vote against May to oust her for a potential Labour Government.
If the UK was to move into a General Election it would be interesting to see how sterling would respond, as arguably the No Deal scenario may be removed entirely from the map. It’s clear from the last few votes in the House of Commons that Theresa May has lost, there is very little appetite amongst a majority of MPs for a No Deal Brexit.
Arguably the lack of support for Theresa May’s deal and the shortage of time available before the 29th March are two of the biggest drivers towards a no deal scenario, therefore a General Election could provide a more cross party alternative. From a timescale perspective if the UK was to have a General Election it’s difficult to see how Article 50 would not be extended.
If you’re looking to complete a transfer in the next week, the best time to trade will be impacted by these unfolding events. It has been the case for so long that predicting what happens next is very tricky, and it is really anyone’s guess with so much politicial uncertainty. With this in mind being in contact with your account manager could help you to maximise a transfer.
Next week MPs will vote on the postponed Brexit vote, where they will decide if they shall accept Theresa May’s deal. On Tuesday there is the potential for a significant amount of volatility depending on the outcome, however at the moment it’s thought Theresa May’s deal will not receive a majority.
In the event that Theresa May’s deal is turned down, sterling could come under pressure, however some would argue we have already started to see that factored in, with the GBP/EUR rate hovering around the 1.10 level for much of the last week. On Wednesday the Retail and Producer Price Index will be released along with the Consumer Price Index which is expected to remain at 2.3%.
Then finally to finish the week on Friday, Retail Sales data for December is expected. The sales data will be an eagerly anticipated release as many retailers this week have reported a decrease in Christmas sales from last year and the concerns on the high street are well known. Sterling could come under even more pressure next Friday following a week of political uncertainty.
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