As the March 29th Brexit deadline looms ever closer, the uncertainty around how the UK will leave the EU is reaching fever pitch. In a dramatic new twist to events, the Speaker of the House of Commons, John Bercow, announced this week that he will not allow the government to present MP’s with a third “meaning vote” ahead of the deadline.
Third Vote Blocked
With May’s amended Brexit plan failing to pass parliament again, the PM has reportedly been considering a third attempt ahead of the March 29th deadline. However, Bercow has cited a convention from 1604 which asserts that a defeated motion cannot be returned in the same form during a parliamentary session. Bercow has said that May will not be allowed to ask MPs to vote on essentially “the same” deal as they voted against last week.
Could We Still See A Third Vote?
Despite Bercow’s intervention, there is still a way that May could press ahead and get a third vote scheduled. The PM could ask the queen to prorogue parliament. This would essentially involve the queen formally ending the current parliamentary session. In turn, this would for another session to be commenced in a few days. During the new session, May could then present a new vote before parliament. However, at this stage, it seems like this won’t be May’s course of action. This is because the biggest support still appears to be in favor of an extension to Brexit.
May is due to ask the EU for an extension to the current Article 50. This would postpone the March 29thBrexit deadline. The PM has said that the length of this extension will depend on whether or not she can agree on a deal with parliament. Brexit minister Kwasi Kwarteng told reporters that “if we have a deal… we will ask for a short extension”.
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“Now if for whatever reason that vote doesn’t happen, or is frustrated or is voted down, we will probably ask for a long extension of the period – and that would be a matter for the EU and for our government to decide.”
EU To Discuss Extension Request
EU leaders are due to discuss the UK’s Brexit extension request at an upcoming summit on Thursday. And, expectations are for the leaders to approve it. An extension would mean that the UK’s status within the EU will remain exactly the same. Many view the extension as likely to result in a much softer Brexit down the line, than the one for which the government has currently been pushing.
For now, the market waits to hear the outcome of the EU summit this week. We also wait for whether or not, and for how long, the EU agrees to postpone the Brexit date. The longer the extension granted for Article 50, the bigger the relief rally we are likely to see in GBP and UK assets.
The rally in the FTSE this week saw price break above the prior 2019 high of 7264.2 to trade fresh 2019 highs. While above here, focus is on a run up to test the next structural resistance around 7496 – 7544. And the bearish trend line from 2018 highs is coming in just ahead of that zone.