On Friday (March 15), Beijing time, the British House of Commons voted on the 14th to pass a government motion calling for a postponement of “Brexit”. The motion received 412 support votes and 202 votes against it. After the news was released, the pound rallied sharply and fell sharply by nearly 60 points to 1.3224. Although the Brexit process has delayed this support for the pound, the political development of the UK has become more and more uncertain.
A spokesperson for British Prime Minister Teresa May said that if the Brexit agreement fails, the next move will be discussed on March 25. Although 50 can be extended, the transition period will end in December 2020. The Prime Minister is committed to leaving the European Union on March 29, and the government is still preparing for a non-agreement to leave the EU. The Prime Minister believes that the Cabinet supports the Brexit policy. The government is currently facing a difficult situation from the parliament. Brexit can be extended until June 30th.
British Health Minister Hancock pointed out that it is expected to achieve Brexit on March 29. If we do not vote for the Brexit agreement, the only option is to substantially delay the Brexit deadline. I hope that the third meaningful vote will pass the Brexit agreement.
British Labor Party leader Corbin reiterated our support for a referendum. British Prime Minister Teresa May's Brexit agreement and no agreement to leave the EU are no longer an option.
EU officials said leaders will consider the reasons for the delay in the Brexit deadline and the delay, and European Commission President Juncker will contact the Brexit leaders. The European Commission said that the request for the extension of the Brexit deadline in the UK is decided by the EU leaders and will consider the reasons for the extension and the extension period to ensure the normal operation of the EU institutions.
At present, there is no possibility of a non-agreement to leave the European Union, but the uncertainty has intensified the downside risks of the UK economy. With the increase in the control of the Brexit process by the parliament and the pressure on both sides of the UK-European economy, the probability of non-agreement of Brexit further declines. The follow-up is more likely to be further negotiated between the UK and the EU on the “backup plan”. Soft Brexit." Therefore, it is expected that once the most turbulent period has passed, the pound that has been suppressed by Brexit uncertainty will rebound. However, the UK economy has slowed down due to global kinetic slowdowns, inflation has also fallen, and London real estate is also feeling the pressure. The continuation of the uncertainty of Brexit will exacerbate the downside risks of the UK economy, so the sooner there is a certain outcome, the better.
Mitsubishi Tokyo UFbankThe research team discussed the latest developments in Brexit. The current focus shifts to today's parliamentary vote, which will give parliamentarians an opportunity to force the government to ask for an extension of Article 50. We expect Members to seize this opportunity. A series of amendments to the motion will also bring additional uncertainty. A group of inter-party lawmakers are planning to force the parliament to make an indicative vote on other options for Brexit to help break the current stalemate.
Overall, this week's progress in Brexit supports our view that the direction of the Brexit process is postponed and may be softer, which has been supporting the pound's strength. However, political development has become increasingly uncertain and there may be more traps ahead.
(Article source: Huitong.com)