THE pound has jumped this morning against the dollar and euro ahead of today’s vote on Boris Johnson’s Brexit deal.
Sterling had slipped when trading opened at 7am by 0.6 percent against the dollar to $1.29 and by 0.4 per cent against the euro to 1.15.
But a few hours later, the pound bounced back to $1.3 to the dollar – a five month high – and 1.16 to the euro.
It means that if you changed up 100 of your holiday money today you’d get $130 and 116.
Today, MPs will vote on the Prime Minister’s proposed Brexit deal.
On Saturday, MPs voted for the Letwin Amendment, put forward by Tory rebel Sir Oliver Letwin, to withhold approval for Boris Johnson’s deal until Parliament has passed the necessary law to enact the agreement.
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This then triggered the Benn Act, which required the PM to write a letter to the EU seeking a three-month extension.
Mr Johnson didn’t sign the letter but instead included a second note sent to Donald Tusk, President of the European Council, stating he personally is not asking for an extension– and signed it at the bottom.
It effectively kicks the can down the road onBrexituntil the necessary legislation has been passed through Parliament, which will be the week after next at the earliest.
Mr Johnson is convinced that today’s vote could see him deliver on his promise to get Brexit done by the October 31 deadline.
But Boris faces a fierce week of parliamentary warfare as Labour has vowed to try to wreck his deal byinsisting on adding a Second Referendumto it.
The Commons will be told to sit late into the night while the Lords could convene at the weekend as No10 scrambles to try to pass the legislation at breakneck speed. One Government aide said the coming days will be “hell on earth” in Parliament.
Boris's route to beat Halloween deadline
- Can Boris still pass his deal? Yes. The PM wants to hold a meaningful vote (MV) on his Brexit deal, after Remainer rebels torpedoed the last one by forcing a delay. But Commons Speaker John Bercow could stop the vote being called by ruling that MPs already had their say on Saturday. If a MV is held and Boris wins, then the PM would hope his Brexit legislation would quickly pass and the UK could leave on October 31.
- What happens if Boris loses an MV, or isnt allowed to have one? Mr Johnson can still get his Brexit blueprint through by persuading enough MPs to vote for the Withdrawal Agreement Bill, known as the WAB. The WAB is being published today and will be voted on by MPs on Tuesday. But Labour and the SNP want to hijack the Bill by tabling amendments to keep the UK in the customs union, stick to single market rules, and force another referendum.
- Will the EU help Boris and block an extension? BoJo has been forced to write to Brussels asking for another Brexit delay. But all of the other 27 EU member states have to agree. French President Emmanuel Macron has warned he does not back another extension, and many other EU leaders are getting fed up. If they veto one then MPs will be faced with the stark choice of Boriss deal or a No Deal on October 31. Faced with that choice, the PMs deal would almost certainly pass.
- What if MPs do not pass Boriss deal? If Boriss Brexit Bill is defeated this week then the PM is expected to try to call a snap election. Labour keep blocking an election, and many in the party are desperate to call and hold a second referendum first. But Jeremy Corbyn has suggested he will back a snap election if Brexit is delayed beyond October 31 – setting the stage for a December election.
Cabinet ministers yesterday revealed theybelieve they have won round enough Labour rebels to pass BoJos deal.
But Speaker John Bercowcould also block an attempt to hold a Meaningful Vote today just as he did to Theresa Mays deal.
The strength of the pound is often affected by decisions made in Parliament.
While no one can predict for sure what will happen to the value of Sterling after the UK leaves the European bloc, we do know that it often becomes stronger when the prospect of a deal becomes more of a possibility.
The idea of crashing out of Europe without a trade deal in place doesn’t bode well for the pound.
For example, the pound soared against other currencies after MPs voted against a No Deal Brexit back in March.
But it also slipped earlier this month after reports that Brexit talks had hit a standstill.
Ian Strafford-Taylor, CEO of Equals currency card, said: “The gains against both currencies follow increased hope the Prime Minister may be able to get a meaningful vote on his Brexit deal within the next 48 hours.”
But he also warns that an extension to the Brexit deadline could be damaging for the pound.
“An extension would spell a period of further uncertainty for the pound while the exact terms are ironed out,” he explained.
“But it would also save the pound from a sharp decline which we could see in the event of a no-deal Brexit at the end of the month.”
Currency expert Michael Brown from Caxton added: “The numbers now appear to be present for a “meaningful vote” on the new Brexit deal to succeed, however it remains unclear whether Speaker Bercow will permit such a vote to take place.
“Should a vote not take place, attention will shift towards tomorrows vote on the second reading of the Withdrawal Agreement Bill the legislation that implements the deal in the UK.
“Such a vote, if passed unamended, would pave the way towards an orderly Brexit, and should see the pound continue to press higher.”
