Shortly after sterling fell to a six year low against the euro, sliding below 1.10 or depths not seen since the March 2010 depths of the European debt crisis, the British currency found a modest respite after comments from a UK government lawyer put Theresa May’s “hard Brexit” plans in flux after stating that it is likely that the Brexit treaty will have to be voted on by both houses.
As Bloomberg notes, speaking before a panel of three senior judges, a UK government lawyer said that any final agreement between the European Union and Britain over Brexit would need to be ratified by Parliament. It is “very likely” that both the House of Commons and the House of Lords would get a vote on any new treaty, even though it’s possible that Prime Minister Theresa May could proceed without, government lawyer James Eadie said Tuesday.
However, his comments didn’t address the central question of whether May can trigger Article 50 of the Lisbon Treaty by April next year without calling a vote in Parliament.
Eadie made the comments during the third day of a lawsuit challenging May’s plan to trigger Brexit without permission from Parliament. Parliament will also have a “central role” in amending domestic legislation to replace EU law rights, Eadie said.
The lawsuit brought by claimants Gina Miller, who runs an investment startup, and Deir Dos Santos, a hairdresser, could undermine May’s plans to invoke Article 50 by the end of March. Any delay would cheer investors concerned that the prime minister is prioritizing immigration controls over safeguards for trade and banking.
The comments helped push cable as high as 1.23, over 100 pips higher from overnight lows, although it remains to be seen if this short squeeze will sustain, especially with Goldman piling on the short side and warning the pound could fall by “around 20-40 relative to pre-Brexit” suggesting parity may well be in the cards.
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