Pound Stronger as Brexit Delayed

EU leaders have agreed that Britain will depart the bloc on May 22 if MPs approve Prime Minister Theresa May's divorce deal, but if not the Brexit date will be April 12

Morningstar News Team 22 March, 2019 | 2:28PM Alliance News
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Theresa May Brexit

The FTSE 100 was lower on Friday as the pound gained after the European Union granted the UK an extension on the article 50 deadline to leave the bloc. UK stocks were also weaker as European economic data put pressure on the euro.

EU leaders have agreed that Britain will depart the bloc on May 22 if UK MPs approve Prime Minister Theresa May's divorce deal. The original departure date was March 29.

At a late night press conference, the Prime Minister made clear she intended to make another attempt to get her Brexit deal through the Commons. The so-called "meaningful vote" wil be the third attempt the Prime Minister will attempt to get her deal approved and could happen next week. Meanwhile, an epetition to revoke Article 50 has been signed by more than 3 million people.

If May succeeds, the EU leaders agreed to extend the Article 50 withdrawal process until May 22 to enable the government get the necessary legislation through Parliament. But if she fails to do so, the UK will have until April 12 to set out its next steps, with a longer extension on offer only if Britain takes part in European Parliament elections in May.

"Though the agreement with the EU - that Britain can extend the article 50 deadline until the day before European elections in May if MPs agree to the current Brexit proposal, or that it can submit a request for a longer delay until April 12 - boosted the pound, it fundamentally provided only a short reprieve as the country remains without a resolution about its future. Under the circumstances the markets will have no option but to remain volatile and dominated by Westminster headlines in the weeks to come," said City Index analyst Fiona Cincotta. 

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