The British Pound is likely to retain a heavy tone in the short-term as the UK political environment descends into crippling uncertainty, after the Government said it would table a vote for an early General Election on Monday but opposition parties indicated they would once again reject the request.
Those watching Sterling should expect it to remain heavy in the current environment that is characterised by growing political uncertainty.
The Government on Thursday night stated that it will offer the UK Parliament a vote on a holding a snap General Election on December 12, however it appears opposition parties are all but set to reject the offer, ensuring the 2/3 majority threshold required for Parliament to trigger such an outcome will be unachievable.
If an election was approved, Johnson would bring the Withdrawal Agreement Bill back to Parliament, giving MPs until November 6 to pass judgement on the legislation and deliver Brexit.
Should opposition parties refuse to vote for an election, as appears to be the case, “we would campaign day after day for the people of this country to be released from subjection to a parliament that has outlived its usefulness,” Johnson told the BBC.
A Downing Street official has suggested that under such circumstances parliament would have little work to do as “nothing will come before parliament but the bare minimum.” In short, the Government is threatening to go on strike.
“Labour has instructed its MPs tonight to block Johnson’s attempt on Monday to have 12 Dec election. So Johnson will shelve the Withdrawal Agreement Bill. He will cancel the budget. There will be no government worth the name. Parliament will become a zombie Parliament, unless and until the opposition find a way to wrest control from Johnson or hold an election. This deadlock is without modern precedent,” says Robert Peston, ITV’s Political Editor.
The Pound has fallen over the course of the past 24 hours as it tends to perform poorly when political uncertainty rises, and we expect to remain heavy until such a time as clarity on the way forward is delivered.
GBPEUR holding steady at 1.1564 at 08:36
GBPUSD drifting at 1.2844 off this mornings high of 1.2897.