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.
Expectations that a Soft Brexit deal are accepted will continue to boost GBP exchange rates although the market remains vulnerable to negative updates on Brexit. PM May’s Plan B will voted on again next Tuesday, January 29. This vote, or a change in voting pattern, may well provide the next catalyst for Sterling movements.
Overall focus will remain on the House of Commons ahead of next Tuesday’s meaningful vote on Brexit. The government yesterday was reportedly considering backing an amendment to give extra protection for workers, which commentators said was an attempt to gain support from some Labour MPs for the meaningful vote. As noted on Wednesday, the government will now have to outline next steps within three sitting days if it loses the vote.