Sterling update

Last night Prime Minister Boris Johnson failed to trigger an early general election. Johnson had wanted an election on the 15th of October, only two days before the crucial summit with the EU in Brussels. Mr Johnson needed to secure a minimum of 434 MP’s to be given the green light to an early election, however, he only managed to secure just 298 votes.  This is yet another defeat against Johnson as opposition MP’s and Tory rebels have backed a bill aimed at blocking a no deal Brexit on the 31th October. As a result, we have seen the Pound claw back some gains it had lost last week.

The “anti no deal” bill forces the PM to ask for yet another extension beyond the 31 October Brexit deadline if a deal has not been agreed with the EU. Johnson has said that MP’s have “scuppered” the Brexit talks.  MPs backing the bill are attempting to push it through as quickly as possible, so it becomes law before the government suspends Parliament next week. The bill will be going through the Lords for approval today.

GBP/EUR has found it’s footing in the mid 1.11’s but if this bill is pushed through the house of Lords we could see the Pound continue to strengthen against the single currency beyond the 1.12’s, as a chance of a no deal Brexit fades into the background. The only issue now will be yet another potential extension to Brexit and what this could do to the UK’s struggling economy.

What does this mean to you?

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