Once again politics continues to dominate the markets focus with the latest twist in Brexit seeing Boris Johnson confirm his request for Parliament to be suspended one week after their return from Summer recess, beginning 9th September until 14th October. This is the date on which the Queen’s speech will be held detailing the legislative agenda of Boris Johnson’s government. The request has received approval from the Queen and will go ahead as planned.
The suspension of Parliament over this time will see MPs lose a number of important days in which they could attempt to legislate against a ‘no-deal Brexit.’ The motivation behind this Parliamentary prorogation was immediately brought in to question by House of Commons speaker John Bercow claiming that it was "blindingly obvious that the purpose of prorogation now would be to stop parliament debating Brexit and performing its duty in shaping a course for the country".
Boris Johnson however, in a letter sent out to each MP, highlighting the need for time as he approaches the key European Council Meeting on 17th and 18th October. Mr Johnson cites an appetite to seek a new deal, “a central feature of the legislative programme will be the Government's number one legislative priority, if a new deal is forthcoming at EU Council, to introduce a Withdrawal Agreement Bill and move at pace to secure its passage before 31 October.”
Sterling dropped lower from some of its strongest interbank levels in over one month (at 1.1080 against the EUR 1.2287 versus the USD) on the back of the news release as the markets digested the fact that Boris intends to offer Parliament just a short window of opportunity to debate and approve or reject any new deal. Johnson continued in his direct message to MPs to pinpoint a vote on any subsequent Withdrawal deal from the EU Council meeting, which are being held on the 21 and 22 October. He went on to say, “should I succeed in agreeing a deal with the EU, Parliament will then have the opportunity to pass the Bill required for ratification of the deal ahead of 31 October.”
With Parliament now due to be suspended from 9th September this reduces the opportunities for Johnson’s opponents to table a no-confidence motion to just one week. This plan of attack had appeared to be ruled out following a meeting amongst opposition leaders and senior MPs on Tuesday this week where they agreed a favoured approach of forcing PM Johnson to seek a further extension to Article 50 however, Brexit Party leader Nigel Farage took to Twitter yesterday to predict that “The government’s announcement today makes a confidence motion now certain, a general election more likely and is seen as a positive move by Brexiteers.”
With so many twists and turns in this stage of the UK’s divorce from Europe it is important to stay informed of developments. You may wish to speak to your account manager if you have any upcoming requirements.
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