Immediate response: UK Prime Minister’s Brexit Speech
|British Prime Minister, Theresa May, delivered some surprises as well as a raft of pre-briefed details in her speech today. The outline for her Brexit plans included an agreement to put the final proposal to parliament for scrutiny; pre-empting the Supreme Court’s decision.
Mrs May also made it clear that Britain’s departure from the EU would not leave a foot in the door. It will be a divorce and not a trial separation but Britain will, in the PM’s view, continue as an outward looking trading nation with a desire to do more business and not less and to continue to be a good neighbour to Europe.
The markets clearly liked what they heard. Sterling rose by a cent against the euro and two cents against the US Dollar while the Prime Minister spoke and the confirmation of parliamentary oversight of the final EU negotiations caused the greatest spike.
Whether the Pound will maintain these gains is open to question. There is little doubt that traders had sold Sterling ahead of the speech and no doubt that the Pound was oversold in early UK trade.
It should be remembered, though, that this isn’t even the starting gun for the EU negotiations. This is akin to a runner limbering up before get set in the blocks. The starter pistol will fire when the Prime Minister triggers Article 50 of the Lisbon Treaty; and that too may be in question because the Supreme Court has yet to deliver its verdict on whether the Prime Minister can trigger that herself or whether she needs Parliamentary consent to do so.”
Volatile trading will continue and a bumpy ride is what awaits the Pound over the coming years. Of that there is no doubt
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