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22 Feb 2017

Could Brexit be put on hold?

House of Lords resume debates on Article 50.

 

The UK Parliament's House of Lords, resumed for the second reading of the bill on Monday 20th February. This allows members to debate the key points and principles of the bill. Due to the large number of speakers (190 members) the second reading has been pushed over two days. It is expected conditions will be added to the bill prior to giving Prime Minister May the authority to trigger Britain's exit from the EU. The House of Commons has already granted approval for this legislation with no amendments. Today, however, the bill may undergo thorough scrutiny, as the House of Lords does not have a Conservative Party majority. Any amendments will have to be revisited by the Commons and agreed to before moving forward. Labour's leader in the House of Lords has previously said colleagues do not seek to delay article 50 with the key focus on guaranteeing the rights of all EU residents in the UK. The Third reading of the bill is scheduled t take place on Tuesday March 7.

 

What happens next?

 

If Pro-EU peers are successful, votes to amend the bill will take place during the committee stage on Monday 27th of February and Wednesday 1st March. Following these votes the bill will return to the House of Commons where MPs will have to either accept or reject the changes. The bill will be past to and from the Houses until an agreement is reached.

 

Article 50 has been scheduled to be triggered by the end of March 2017 and Prime Minister May believes it will get through parliament in time to do so. Dominic Raab, a Tory MP and a member of Change Britain, said: "Voters will not look kindly on unelected politicians seeking to obstruct both the result of the referendum and the vote of their elected representatives in the House of Commons earlier this month." .

 

In the aftermath of the Brexit referendum on June 23rd, Sterling felt the brunt losing close to a fifth of its value against the euro. Sterling is to face a further drop of 16% on the triggering of Article 50, which is now only 6 weeks away. Data releases from last week have also added to the fall in sterling. The UK retail sales fell during the month of January -.3% compared to market expected of .9%. Additionally the UK wage growth also fell to 2.6% from 2.7%.

 

Should the House of Lords succeed in making amendments to the Article50 Bill markets expect this to have a positive impact for sterling?

 

So what can I do for my business?

 

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If you are concerned about further sterling weakness, our team can advise you today on the best options for your business!

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