Pound to Euro exchange rates have risen after the historic vote in the House of Commons last night. Rates for GBP EUR have rallied higher to 1.1276 for the GBP vs EUR pair creating a small window of opportunity for those looking to buy Euros. UK Prime Minister Theresa May lost the vote on her Brexit deal by a seismic 230 votes highlighting how unpopular her deal is in its current form. Labour leader Jeremy Corbyn immediately put forward a vote of no confidence in the government which will take place today at 7pm.
Whilst the government are expected to win this vote there is of course the chance that the vote could throw up some surprises but this seems unlikely. The markets now await a statement from the Prime Minster which is expected to be delivered on Monday where she will outline the next steps. The pound appears more supported as it becomes increasingly clear there is not a majority in the House of Commons for a no deal Brexit which is helping to lift GBP EUR.
Whilst the default option is to come out of the EU without a deal at the end of March if no deal is agreed there are pressures building to seek a different course. One option being considered is to possibly delay the 29th March date which could end up in a softer type of Brexit or no Brexit at all. The most likely route will be that Theresa May will now got back to Brussels to seek a better deal and look for changes to the Irish backstop which has proved the most difficult of hurdles.
Having lost by such a margin it gives her the authority to say this deal is absolutely not acceptable to the British parliament although whether the EU are prepared to make adjustments remains to be seen. There are likely to be some big market reactions in these coming days as events continue to unfold in British politics in these very uncertain political times.
Bank of England Governor Mark Carney will be making a speech this morning which could create additional volatility for GBP EUR. His comments which have often waded into the political arena can create market movement and any commentary on Brexit could see market reaction for the GBP vs EUR pair today. UK Consumer Price Index inflation data is released this morning as are mortgage approvals numbers from the British Bankers Association although the data will largely be overshadowed by political developments.
The Euro continues to face its own problems after another gilet jaunes protest in Paris at the weekend. President Macron has now started a series of debates to tackle the main issues but it is clear there is much hostility to his policies and support for the yellow movement is growing. Combined with a weakening outlook in some of the bigger countries to conclude Germany, Spain and Italy and the outlook for the EU both politically and economically is looking less bright at present.