In this Pound vs Euro forecast I discuss yesterday’s vote in the House of Commons, when the Prime Minister’s Brexit deal was once again unsurprisingly rejected by a majority vote of 149 MPs. Owing to this result, MPs will be voting later on today whether or not the UK will attempt to leave the European Union without a deal on the 29th March.
The currency markets moved dramatically during yesterday’s trading session, but in the lead up to the vote the markets were muted. This is because the vote did not really come as much of a surprise to the markets.
If MPs vote against a ‘no deal’ later today, then another vote will take place tomorrow on delaying Brexit.
I think this is the most likely outcome and I expect Article 50 to be extended. This would mean the UK will not be leaving the European Union as originally scheduled on 29th March.
I also expect Theresa May to go back to the EU in an attempt to get more amendments made to the current plan. However, the Irish backstop is not yet resolved. Thus, I cannot see how anything she does over the next few days will result in a change in the House of Commons, if MPs are given another vote on the deal in the near future.
The idea of a ‘no deal’ Brexit is not popular either in the House of Commons or the EU, so the likelihood is for an extension. Even Attorney General Geoffrey Cox has said that a Brexit delay is now “inevitable.”
The next step will be then for Parliament to explain why they will look to extend Article 50.
Today at lunchtime Chancellor Philip Hammond will announce the latest Spring Statement. With such uncertainty surrounding Brexit, it is likely that the Statement will be relatively subdued and the focus will remain on the continued Brexit news.
Should I buy Euros now or wait?
With so much uncertainty surrounding GBP/EUR rates, it is difficult to predict what may happen. However, I think once we get a ‘no deal Brexit’ removed from the table, this could provide the Pound with some support.
If you would like a free quote when buying or selling Euros and would like to save money on exchange rates compared to using your own bank then contact me directly. I look forward to hearing from you.
Tom Holian firstname.lastname@example.org