GBP/USD Sinks After Supreme Court Says Brexit Needs Parliamentary Approval
- Government needs parliament’s approval to trigger Article 50, Supreme Court rules
- GBPUSD slumps as ‘hard Brexit’ still the most likely outcome
The British Pound sank Tuesday, making a fresh low for the day, after the UK Supreme Court ruling makes a ‘hard Brexit’ more likely. The Court said that the UK government would need approval from Parliament to trigger divorce proceedings from the EU, and added that the government does not need approval from Scotland, Wales or Northern Ireland. The ruling, by 8 votes to 3, makes PM Theresa May’s trigger date of the end of March more likely and sent Sterling lower against both the US dollar and the Euro.
The UK government will now put the triggering of Article 50 to a parliamentary vote. This vote is likely to pass with a very large majority of Conservatives behind UK PM May while Labour leader Jeremy Corbyn has also advised his MPs to vote for the ruling and not frustrate the will of the UK population.Post-decision a spokesman for the UK government said that the PM would be laying out her plans for Parliament shortly and the ruling does affect the plan to trigger Article 50 by the end of March.
GBPUSD fell nearly one cent lower to 1.2435 before steadying, while EURGBP rose to a day’s high of 0.86334 before edging slightly lower.
Chart: GBPUSD 1-Minute Timeframe (January 23-24 2017).