Daily Brexit update: Extension request and rejection duress
The Prime Minister has finally requested an extension of the ‘negotiating period’ before Britain leaves the European Union of three months. This request has been swiftly rejected. In theory, that means it’s back to the drawing board for Downing Street, in terms of not just an urgently needed Brexit delay, but also for chances of Theresa May’s Brexit deal getting parliamentary approval before time runs out in 9 days.
It’s just another day in the moveable feast that is Brexit. Naturally, the day’s headlines so far are garnished with several twists, so even deepening uncertainty has a false wall. Chiefly, a European Union Commission document has emerged, according to Reuters, stipulating that any delay—which officials continue to insist will not be discussed at this week’s summit—must be either several weeks shorter than the period to the end of June or should push Britain’s exit to at least till the end of this year, forcing the UK to participate in EU elections. The European Council President has also announced another condition: that the UK must succeed in winning parliamentary approval for the Brexit deal.
In any case, the government would have till 11th April to decide whether Britain will field candidates for 23rd May’s European elections. The market is interpreting the latest twists as dithering, though dithering with somewhat more negative overtones than seen since MPs rejected the government’s Brexit formula for a second time last week. As such, sterling has trimmed even more of the gains made to 2019 highs just above $1.33. The rate against the dollar is testing the underside of its $1.3181 one-week range bottom. With the market on tenterhooks over what the EU or May could do next, forthcoming developments will govern whether that key support gives way, likely stoking a ramp in short-term volatility.
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