All Eyes On House Of Commons Plan B Vote.
Tomorrow will see yet another major debate on Brexit in the House of Commons and will be the main UK focus this week. A number of amendments have been tabled, some of which are expected to be selected by the Speaker to be voted on from 19:00 tomorrow evening. The Cooper-Boles amendment has attracted particular attention as, if passed, it will provide MPs an opportunity to vote to legally bind the government into extending Article 50 to the end of the year if there is no approved Brexit deal by 26 February. Other amendments (e.g. Corbyn/official Labour, Grieve, Benn) provide scope for MPs to vote on different Brexit options, while the Murrison amendment adds a time limit on the Irish backstop (although the EU has not indicated a willingness to accommodate that). Amendments with government or opposition backing are probably more likely to pass.
Over the weekend at least one well-known Brexiteer seemed to suggest that he would be prepared to vote for the deal if it is amended to rule out a permanent tie-in to the EU. The PM seems set to return to Brussels to extract such a concession, although the EU is so far still indicating unwillingness to time limit the backstop. Meanwhile, markets have reacted to recent developments by pushing sterling higher. The pound enjoyed its best week since 2017 rising to 1.32 against the US dollar and to 1.16 against the euro.
The US government shutdown has ended for now, although the dispute between President Trump and Democrats in Congress over funding for the border wall with Mexico has still not been resolved. That makes it possible that the shutdown will resume three weeks from now. This week’s US economic data calendar is particularly uncertain as a result of the shutdown. We expect the release of a backlog of delayed data but its timing is still uncertain. Moreover, some data due out this week, most significantly Q4 GDP, will still probably be delayed.
There are no official UK economic data releases this week but January updates for the Lloyds Barometer, GFK consumer confidence (both Wed) and the Manufacturing PMI (Fri) will all provide updates on the strength of the economy in early 2019.