A meaningless Brexit vote

Next on the checklist, a vote of no confidence in the government

There’s been plenty of speculation about just how heavy a defeat May will face when the Brexit deal comes before parliament and it was just as devastating as many had feared.

While the “meaningful vote” was in many ways meaningless, the defeat – at least symbolically – was crushing for May’s deal. This was more actually nothing more than a necessary exercise that will now accelerate the process and allow other options for parliament to be explored, including a vote of no confidence in the government that was quickly tabled by the opposition Labour party after the defeat.

This also looks unlikely to succeed without the support of the DUP, which continues to support the Conservative party, but again this is a necessary exercise that ticks another box and allows for a second referendum to gain momentum. It’s no surprise then that the EU has not changed its position on the exit deal as a referendum or withdrawal of article 50 is clearly in its best interest, especially when parliament is so determined to kill no deal as an option, the only scenario that actually strikes fear in Brussels.

We have no entered into a process when all other feasible options can be explored before a deal – May’s or otherwise – returns to the house in what will actually be the meaningful vote that was promised. Until then, we can expect plenty of brinkmanship on both sides as they look to secure the upper hand which only adds to the uncertainty and ensures investors don’t rest.

We’ve seen plenty of volatility in the pound today, both ahead of the vote and in the immediate aftermath of it. The end result has been that it is pretty much back where it started the day against the dollar. This highlights just how uncertain the process remains and how little has been achieved with the vite today.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Craig Erlam

Craig Erlam

Senior Currency Analyst at OANDA
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the Wall Street Journal and The Telegraph, and he also appears regularly as a guest commentator on networks including Sky News, Bloomberg, CNBC and BBC. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.