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Pound choppy as UK parliament in turmoil over Brexit deal

Lianna Brinded
·Head of Yahoo Finance UK
Photo: Getty
Photo: Getty

The pound against the US dollar (GBPUSD=X) was choppy in the first weekday trading session following an extraordinary session in UK parliament over the weekend that saw prime minister Boris Johnson’s Brexit plans in disarray.

Initially, investor sentiment remained dampened, with cable down by 0.6% and hovering around the $1.29 mark, as traders await to hear when a vote on Johnson’s Brexit deal, which was sealed with the European Union last week, will be held. However, it bounced back into positive territory around 920am UK time.

Chart: Yahoo Finance
Chart: Yahoo Finance

On Saturday, Members of Parliament (MP) backed a motion to further delay the process of Britain leaving the EU.

Dubbed Super Saturday, UK parliament held its first Saturday session in 37 years. Johnson tried to convince MPs to support his agreement he made with the EU and MPs debated the proposal. Johnson said in a speech "now is the time to get this thing done," adding that delaying past the Brexit deadline of 31 October would be "corrosive."

Johnson’s cabinet threatened to postpone a vote on a revised deal if politicians voted to drag out Britain’s exit from the 27-nation bloc, again. However, MPs voted 322 to 306 to back a motion designed to rule out a no-deal exit — which is what will happen if politicians do not agree to Johnson’s new deal with the EU. It was tabled by independent MP Sir Oliver Letwin, which "withholds approval” for Johnson's Brexit deal until legislation implementing it has been passed.

READ MORE: UK economy delivered fresh blow as MPs ask for Brexit delay

Subsequently, Johnson was obliged to go to the EU and ask for an extension beyond the 31 October deadline — the second extension in under a year.

Johnson said at the time that he will press on "undaunted" with his Brexit strategy while the EU said it was up to the UK to "inform it of the next steps." MPs signalled that a vote on Johnson’s revised Brexit agreement could now take place on today — however, this is up to the Speaker of the House of Commons.

However, Johnson caused greater ructions among parliament after he sent three letters to the EU:

  • An unsigned photocopy of the request for an extension as outlined by the Benn Act and in which he is obliged to give

  • Another note from the UK’s ambassador to the EU explaining why

  • A personal, signed letter from Johnson on why he doesn’t want a delay (which is inline with that he has repeatedly said since he became prime minister. He has even said, he would rather be “dead in a ditch” than delay Brexit).

READ MORE: Snap poll: Most UK firms push MPs to support Boris Johnson's Brexit deal

Johnson is now under scrutiny from the law as judges are set to decide whether the unsigned letter sent by Johnson complied with the Benn Act or if the prime minister is in contempt of court. Meanwhile he said parliament must be given "a straight up-and-down vote" on the prime minister’s Brexit deal

“We cannot allow parliament's letter to lead to parliament's delay," he said.

It is now up to Speaker of the House of Commons John Bercow to grant a vote on Johnson’s Brexit deal in parliament.