The Shifting Sand of Brexit: movements of the past 7 days

The Shifting Sand of Brexit: movements of the past 7 days

One week down of the 5-week Prorogation, and if anything, things are heating up rather than cooling down with the court system getting involved.

 

Brexit: Where are we this week

 

  • Biggest news of the past seven days has been the Scottish appeals court ruling the prorogation of Parliament was unlawful and that the PM misled the Queen. The court stopped short of ordering parliament to reconvene; instead passing the buck to the UK Supreme Court to deliver the final decision on whether an interdict should order forcing Parliament's return. The hearing began on Tuesday and will be held over the next 3 days. Judgment is likely to be handed down early next week.  
  • Operation Yellowhammer – the code name for the planning assumptions in the event of a ‘no-deal’ Brexit.

 

Government was forced to release details of Yellowhammer this week. There had been plenty of rumours over the past 24 months about what Yellowhammer found, in short; the rumours appear to be close enough to the truth. The report showed that a ‘no-deal’ Brexit would likely result in rising food and energy prices, disruptions to essential supplies including medicines and purification products coupled with an increased risk of public disorder. The PM, however, is still saying that Britain can cope well in a ‘no-deal’ Brexit scenario despite its own paper suggesting the contrary.

 

  • ‘Huge (no) Progress’ – PM spent the past 6 days stating progress is being made. However, Number 10 and Brexit spokespersons have downplayed the ‘progress’ and that a breakthrough ‘deal’ is still a way off.

 

The ‘progress’ is believed to be around the Irish backstop where customs and other trade checks could take place on Irish sea while still allowing Northern Ireland to leave the EU as part of the UK. Technically, it would leave Northern Ireland inside EU regulatory frameworks in areas such as agriculture. This is not being met with ‘excitement’ by the Democratic Unionist Party (DUP) with leader Arlene Foster publicly stating, ‘UK must leave as one nation.’

This comes as Ireland’s Prime Minister stated at a dinner with his Northern Ireland counterpart that no new proposal or even any concessions has been put to the EU by London. Remember the European Council on the 17-18 is a mere 4-weeks off and is the last chance for any new Brexit legislation to be passed by the EU.

 

  • Outgoing House Speaker John Bercow showed he isn’t done yet when he stated he was prepared to wade into unchartered waters and allow ‘additional procedural creativity’ to block the PM. This speech came about due to growing alarm the PM might force a no-deal on Britain which is technically illegal after the laws passed in the final week of Parliament.

 

His view is perfectly summarised here:

“If I have been remotely ambiguous so far, let me make myself crystal clear. The only form of Brexit that we have, whenever that might be, will be a Brexit that the House of Commons has explicitly endorsed.”.

 

  • The PM also reiterated his remarks to outgoing EU Commission head Jean-Claude Juncker that Britain would not ask for a further extension to Brexit (again despite Parliament voting to force him to do just that).

 

The meeting as a whole did not go well with neither side suggesting the other was willing to negotiate and Juncker then later stated in a written statement that it was the PMs responsibility to come forward with legally binding solutions which as yet ‘such proposals have not yet been made’. Johnson was then chastised by Luxembourg’s PM for pulling out of a joint press conference because of protestors post the Juncker meeting.

 

  • On a final, brighter note for the PM – the latest YouGov poll came out showing Johnson approval rate is the highest it’s been since taking over from Theresa May. At -15 points it’s not great but compare this to Jeremy Corbyn which has fallen to -49. He would be a shoo-in at a snap election.

 

All this news has been seen by the markets move as follows over the past 7 days.

GBP/USD

FTSE 100

EUR/GBP


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