Yahoo Finance Brexit delay agreement pushes pound higher
The pound against the US dollar (GBPUSD=X) climbed following the UK and European Union agreeing to delay Brexit until 31 October this year.
Sterling rose against the dollar to pop above $1.31 after the possibility of a no-deal Brexit — which would’ve been the default outcome of Britain leaving the EU on 12 April if an extension was rejected by the bloc — was quashed temporarily.
Late last night, Britain and the EU agreed to a “flexible extension” of Brexit until 31 October this year, after five hours of talks at an emergency EU summit in Brussels. Prime minister Theresa May had previously been asking for a delay until 30 June, while European Council president Donald Tusk had repeatedly said that the option for a year-long extension was on the table.
The extension to Article 50 — the mechanism that notifies when Britain will leave the EU — does not mean negotiations will reopen between the bloc and the UK. It means that it gives May more time to try and pass her withdrawal agreement in parliament. She has tried that three times before and each time it has been rejected by MPs in and out of her party.
She confirmed that “if we are able to pass a deal in the first three weeks of May, we will not have to take part in European elections and will officially leave the EU on Saturday, 1 June.”
Tusk said his “message to British friends” was “please do not waste this time.” Irish Taoiseach (prime minister) Leo Varadkar also warned that Britain must now hold European elections in May, or leave on 1 June without a deal.
“I continue to believe we need to leave the EU, with a deal, as soon as possible,” said May in a statement, following the agreement with the EU.
“And vitally, the EU have agreed that the extension can be terminated when the Withdrawal Agreement has been ratified — which was my key request of my fellow leaders.
“I know that there is huge frustration from many people that I had to request this extension. The UK should have left the EU by now and I sincerely regret the fact that I have not yet been able to persuade parliament to approve a deal which would allow the UK to leave in a smooth and orderly way.
“But the choices we now face are stark and the timetable is clear. So we must now press on at pace with our efforts to reach a consensus on a deal that is in the national interest.”
