Brexit Drama Is Back

After the shock, the reality should continue. This is how it is in the UK now. Almost no one expected Brexit to happen, but the British people decided, and it was clear that they want to leave the EU once and for all.

Politicians in the UK and the EU were in shock, the former PM resigned, and a new PM was appointed (Theresa May), who should be responsible for the Brexit negotiations. Things were tough since the outcome of the Brexit vote, the politicians in Europe and the UK were trying to find a way to get along. However, they ended up blaming each other for the outcome of the referendum, which made it even worse.

The UK government couldn’t wake up from that nightmare until today. The government decided to start the negotiations without discussing it with the parliament. The funniest part is that the parliament didn’t make a move. A business woman and a barber decided to raise the case against the government, and then, the parliament supported the movement.

Today is the day when the British government is faced with reality, Brexit is real, but it needs to be approved in full by the parliament. However, the court ruling is not in favor of Scotland, Wales and Northern Ireland.

The court ruling showed that the British government has no obligation to assent with Scotland and Northern Ireland. This is alarming!

Scotland voted in favor of staying in the EU; they never supported the idea of the referendum from the beginning. The Brexit outcome showed how divided the nation is. This also increases the possibility of another referendum ahead.

Scotland May Leave

This is highly possible now, not only after the Brexit referendum outcome but more likely after the supreme court ruling today. With today’s decision, its like saying Scotland need to stay on the sidelines until we get the job done!.

The reaction to the ruling from Scotland came very fast, Scotland’s Sturgeon said that the ruling is not worth the paper it was written on, asking the UK government to include Scotland in the negotiations, saying that the UK government has a political obligation to do so. What’s alarming is that she also said “Scotland must make a choice on taking future into its own hands. This is some sort of threat to hold another independence vote soon. Is it possible? Yes, it is!

What Does The Ruling Mean For The Markets

The British Pound declined by more than 0.7% following the court ruling. However, traders need to be very careful in judging the court ruling. The decision to include the parliament is actually a positive factor for GBP and FTSE.

Involving the Parliament in the negotiations and/or to vote on a clear plan for brexit will probably take ages to reach an agreement. This would extend the expected the timeline of leaving the EU in full. Therefore, traders should not be rushing to short GBP pairs as of yet.

We know that the general outlook for the Pound is negative. However, rejecting the initial plan by the parliament will probably lead another short squeeze, which may last for weeks if not months until they come up with a deal.

"This article is written by Nour Al-Hammoury"