A UK election now looks inevitable - the only question now is 'when'. However, the chances of a 'no deal' Brexit on 31 October appear to have receded, but there are still ways it could happen, and given the outcome of an election looks deeply uncertain, despite the Conservatives' lead in the polls, the rebound in sterling is unlikely to have legs. UK lawmakers achieved a major breakthrough last night in their bid to avert a ‘no-deal’ exit on 31 October.
Brexit or how to deliver the undeliverable
As expected, the House of Commons passed the Brexit delay bill, which is now being debated in the House of Lords (where the Government tries to 'filibuster' it). It will probably come into law on Friday. In addition, as expected, PM Boris Johnson lost the vote on his call for a snap election. The opposition does not trust Boris Johnson and wants to pass the Brexit delay bill first. Still, a snap election seems unavoidable at this point. While it is not important when the politicians agree on a snap election, the choice of election day is very important
It is widely agreed that the pound sterling volatility remains closely linked to the developments on the Brexit front. Recently, events have escalated when British Prime Minister Boris Johnson successfully prorogued Parliament (shut down). The Queen approved the suspension which is supposed to happen between 9 th and 12 th of September. Knowing they only have a small window of opportunity to react before the scheduled recess, UK Parliament returned on Tuesday ramping up efforts to block a no-deal Brexit amid talks of a no- confidence vote.