Sterling has weakened slightly following the House of Commons (HoC) vote this evening in favour of the British “government requesting from the EU a one-off extension to Article 50 ending 30th June 2019, with any extension beyond that date probably requiring the UK to hold EU parliamentary elections in May 2019”. There was, in line with expectations, a broad majority for this motion with 412 MPs voting in favour and 202 against. Prime Minister May is expected to ask the HoC to vote for a third time on her draft Brexit deal on Tuesday 20th March – the day before the European Council Summit.
Should the HoC vote in favour of Prime Minister’s deal in its third attempt, the British government is expected to ask the EU for a three-month extension in order to allow sufficient time for the Brexit deal to become enshrined into law. However, should the HoC for a third time vote against Prime Minister May’s deal, the government could be under pressure to ask the EU for a longer time extension to allow sufficient time for a plan-B to be put forward. The EU has suggested that it would agree to an extension of Article 50 as long as the government put forward a concrete plan which did not involve re-opening negotiations around the current draft Brexit deal on the table.
