Sterling saw a turbulent day as Brexit continues to control the movement of the Pound. Sterling dipped on Tuesday afternoon as reports surfaced that the majority of Labour Party will not be in favour of Theresa May’s withdrawal agreement with a meaningful vote on May’s deal fast approaching.
John McDonald of the Labour Party urged members of the Labour Party to get behind a backbench motion that would trigger a second referendum. Labour had asked for the original amendment to be redrafted in Parliament so MPs can support another referendum without approving Theresa May’s Brexit deal. Labour have previously stated that they are not in favour of the current deal on the table and are pushing for a second referendum. McDonald went onto say ‘’we’re trying to ensure our members don’t have to vote for Theresa May’s deal to get to the stage’’ implying that Labour want an amendment to be voted on before May presents her Brexit Deal to Parliament on March 12th.
Theresa May’s chief whip Julian Smith told cabinet that he was not confident that May will get her deal through Parliament next week. He said it will be ‘tight’ with negotiations still going on with the EU regarding the Irish backstop problem.
Finally Mark Carney spoke yesterday, giving his assessment on Brexit and the economy. He stated that the U.K. have made ‘constructive developments’ if the U.K. crashes out the EU without a deal. The Bank of England intially said a disorderly Brexit could cause GDP to fall by upto 8% but have since revised this to 3.5% of GDP. Carney also made reference to the Monetary Policy saying the interest rates aren’t high enough but believes if there is a smooth Brexit then this could cause growth forecast to grow above trend and could cause future interest rate hikes in the near future.