With the Euro and Dollar broadly stable today the focus has been squarely on the fall in Sterling to a 9-week low. Theresa May’s government effectively suffered three successive defeats today. First, the government will now have to publish legal findings on Brexit to avoid being in contempt of court. Second, the ECJ Attorney General said that in his professional opinion the British government could unilaterally decide to delay its exit from the EU beyond 29th March. Finally, the government suffered a parliamentary defeat this evening. A motion amendment put forward by Conservative MP Dominic Grieve has been voted through which confirms that parliament has the right to amend whatever motion Prime Minister May brings back to the House of Commons should the latter vote down her Brexit deal next week.
Markets have interpreted these developments as reducing the odds of parliament voting through the Brexit deal on 11th December and increasing the odds of the UK leaving the EU without a deal. But an alternative take is that while these developments indeed increase the risk of Parliament voting down the deal next week they also make it easier for Parliament to vote down a no-deal Brexit and push for a second referendum.
