Yesterday, talks continued between the Government and Labour Party to try and get the required progress to get a Brexit deal agreed.
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It does seem like there is still very little progress being made and it seems like a deal is unlikely to be agreed very quickly.
Labour still want Theresa May to remove her red line on a customs union but she still does not appear willing to do so, along with this, Labour are equally happy not to rush into anything. With the European elections just around the corner the clock is well and truly ticking.
Whilst this is all going on, the value of the pound is slowly creeping down, with interbank levels sitting in the 1.15s at present having reached a level up in the 1.17s a few weeks back.
Uncertainty is generally seen as negative for a currency and this current political uncertainty is not only hitting the economy but also hitting the value of sterling too.
More added pressure to the latest Brexit negotiations as it is suggested that is Theresa May has not got a deal agreed by the 22nd May, then having to take part in the European elections could cost the UK over £100 million. Indeed candidates have to be submitted by the end of the day today so the wheels are well and truly in motion.
The last European Parliament election cost £109m back in 2014 and I would expect the bill for 2019 to cost even more than that.
Currently, the Brexit Party with Nigel Farage at the helm is odds on favourite to win the majority of seats and current support levels suggest 27 percent for the Brexit Party, 22 percent for Labour and 15 percent for the Tory Party.
Planning to stage the polls has already started and if the UK does not take part in the European elections on 25th May or get a deal agreed then we would have to leave the EU with no deal on 1st June.
No deal is not an avenue that the UK wants to go down, hence the fact that plans are starting to take shape for the polls but it does seem like the ideal result for the Government would be to get a deal in place and break the aforementioned deadlock to avoid what could be an embarrassing result for them.
Tory backbenchers last night rejected a bid launched by Brexiteers to alter party rules so that they have the opportunity to remove Theresa May in the summer. The 1922 committee, known as the Conservative Private Members Committee rejected a request to be able to bring forward a vote of no confidence however they did request some clarity from Prime Minister May surrounding her exit date.
We could expect to hear a date for May’s resignation at any time however going on previous events I would doubt she would want to put any official lines in the sand until she has ‘delivered Brexit.’
Although she has survived this possible headache it does show of huge issues within the Conservative Party and a lack of confidence surrounding their leader, which again just heightens political uncertainty and could weigh on sterling exchange rates in the near future.
Chancellor Philip Hammond confirmed yesterday morning that he has started the hunt for a new Bank of England Governor with current Governor Mark Carney due to depart in January 2020.
He confirmed that the search has now begun and interviews would happen over the summer and that ideally they would like to position the successful candidate for an 8 year stretch.
Mark Carney departs after taking the position in 2013 and the reason why this is important is due to the fact that a new Governor may have a different view on fiscal policy and how to approach the economy in the coming years.
This will be one to watch over the coming months and it is also key to remember that whoever decides to put themselves forward will most likely have to steer the ship through post Brexit waters so it is quite a job to take on!
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