Parliamentary Vote on EU Withdrawal Amendments

Published / Last Updated on 30/01/2019

Summary of the parliamentary vote on amendments to the EU withdrawal agreement on 29th January and how it will affect markets.

  • Yvette Cooper’s deal to make it legally binding that cannot leave EU without a deal was defeated.
  • Dame Caroline Spellman and Jack Dromey’s amendment that UK should not leave EU without a deal (not legally binding) was accepted – i.e. an indication that MPs want a deal.
  • Final amendment was Sir Graham Brady’s amendment that the government should go back to the EU to seek alternative arrangements to NI backstop and this was successful.

Both Tory and Labour MPs went for and against their party line across the board.

  1. MPs don’t want to delay/postpone Brexit
  2. MPs want a deal
  3. MPs want to change the NI backstop.

Result:  If EU will not budge, this dramatically increases the chances of a no deal Brexit.  The pound has weakened on this meaning FTSE 100 jumped nearly 2% by 2pm today after 1.29% gain yesterday – that’s over 3% in just over 36 hours.

Future:  Who will blink first?  This could be the biggest game of Chicken since WWII.   When Chamberlain went to Berlin and came back from Hitler with his 'Peace in Our Time' slip, it was the UK that blinked and wanted peace – months later Hitler was in Poland.

Will May stand strong?  Whichever way you voted, we all want certainty. 

Expect more ups and downs for FTSE 100 and the pound in the next 3 weeks.  The pound will strengthen (FTSE 100 to fall) and weaken (FTSE 100 will rise) on each rumour, statement and political spin.  Mrs May will go to Brussels and then in 2 weeks more parliamentary votes likely – assuming the EU offer some concessions.

No concessions – if the EU won't move and MPs won't move, it is a case of who blinks first?  Either way this would mean heading towards a no deal Brexit and technically then a border between Northern Ireland and the Republic of Ireland which neither side wants.  So get on with we say and work something out for the good of all.

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