Prime Minister Theresa May told lawmakers on Tuesday to hold their nerve over Brexit and give her more time to negotiate a deal acceptable to both the European Union and the British parliament.
British lawmakers rejected May’s withdrawal deal last month, with the major sticking point being the Irish ‘backstop’ - an insurance policy to prevent the return of a hard border between British province Northern Ireland and EU-member Ireland.
The EU says the backstop is vital to avoiding the return of border controls in Ireland and has refused to reopen the Brexit divorce deal, though May insists she can get legally binding changes to replace the most contentious parts of the backstop.
Parliament is to hold a debate on Brexit on Feb. 14 but with just 45 days until Britain leaves the bloc it is not expected to change the course of the exit process, and no date has been set for another vote to approve or reject May’s deal.
May said if she had not yet reached a deal in Brussels, she would deliver another progress report on Feb. 26 and provide another chance for parliament to express its opinion on her approach the following day.
Bank of England Governor Mark Carney added comments on Tuesday that Britain should be under no illusions about the likely shock to its economy if it leaves the European Union next month without a transition deal to ease the shock. “You have got to recognise this could go quite badly. We are 45 days before the possibility of it,” Carney said, answering audience questions after a speech at a Financial Times event.
“We shouldn’t be under any illusions — I’m not going to put a point estimate on it — but a no-deal, no-transition Brexit would be an economic shock for this economy.”
The dollar was down modestly mid-morning on Tuesday, cooling what was its longest winning streak in two years, as investors put money in riskier assets on rising hopes of a breakthrough in U.S-China trade talks.
Top U.S. officials arrived in the Chinese capital on Tuesday ahead of high-level trade talks as the world’s two largest economies attempt to hammer out a deal ahead of a March 1 deadline to avoid another escalation of tariffs.
Washington is expected to keep pressing long-standing demands that Beijing make sweeping structural reforms to protect American companies’ intellectual property, end policies aimed at forcing the transfer of technology to Chinese companies and curb industrial subsidies.
09.30 – GBP: CPI YoY; Forecast at 1.9% against previous of 2.1%
13.30 – USD: CPI MoM; Forecast at 0.1% against previous of -0.1%
13.30 – USD: Core CPI MoM; Forecast same as previous at 0.2%