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Brexit: what’s happening next and what does this mean for your currency?

11 Dec 2018

 
Brexit can be confusing, especially at the moment as everyone seems to be wanting and saying different things. So, what are the six post Brexit scenarios that COULD happen?

If Mrs May’s deal is approved by members of Parliament, the legislation will pass and the withdrawal agreement will come into force on 29th March 2019.


If the withdrawal deal is not approved, the government will have 3 weeks to set out a plan of action to get their deal approved. They will have 6 options…

6 options photo from BBC News

Photo by BBC News



1.       No deal

2.       A second vote (in parliament)

3.       Renegotiation with the European Union

4.       A general election

5.       A second public referendum

6.       A vote of no confidence

7.       Other consequences

 


Members of Parliament now have more power over alternative plans of action after the government defeat last week, but any alternatives proposed would still need to be put into law by the Government.

 


 

What would happen if any these options were to happen?


No Deal


If nothing else happens, the default position would be a no-deal Brexit. The law is already in place which means the UK will leave the EU on 29 March 2019. MPs could also pursue a vote of no confidence against the government.


 

Second vote on the deal


The government would take the withdrawal agreement back to the European Union. If the EU agrees the amendments, the vote is then taken back to Parliament.


If the EU refuses their amended deal, and there is no clear shift in the will of the House of Commons, the speaker will decide as to whether a second vote is necessary. If he does, MPs will vote again, if they don’t, the government must reconsider their withdrawal agreement.


 

Renegotiation


Theresa May would go back to Brussels to renegotiate her withdrawal deal to get a possible extension to Article 50. This would then go back to Parliament to vote, and if this passes the renegotiation will be implemented.


If the EU refuses the renegotiation, the government must reconsider and choose another of their options.


 

General election


To get a political mandate for her deal, Theresa May could ask MPs to vote to hold a general election. If two thirds of MPs approve, Theresa May would need to ask the EU for an extension to Article 50.


If MPs refuse a general election or the EU doesn’t agree to extend Article 50, then the Government would again need to choose another of their options.


 

Vote of no confidence


If a vote of no confidence is called and the Government wins, the Government will remain in place.

If the Government loses and there is a clear new government, Theresa May must resign and a new PM is appointed.


If the Government loses and a new Government is not clear, there is a question as to whether the Government can win a vote of confidence in 14 days. If it can, the Government continues. If it cannot, a General Election is held.


 

 

Another referendum


If the Government calls for a second public Referendum and MPs approve, the EU will have to approve an extension of Article 50. If this is granted and legislation is approved by Parliament, a Referendum is held.


If Members of Parliament reject a second Referendum, the Government will need to reassess their options.

 


Other consequences


Not only does Theresa May have Brexit issues facing her, she may also have leadership challenges and a vote of no confidence within her own party. If 48 Conservative MPs write to the chairman of the 1922 Committee with a vote of no confidence in Mrs May’s leadership. This would change the Conservative leader and the Prime Minister.


 

What does this mean for your currency?


Although daily fluctuations in rate are normal in the world of currency, strengthening or weakening of GBP is linked with Brexit announcements and an uncertain or more positive outlook. The current uncertainty of a deal being passed is causing the value of GBP to fall meaning other currencies such as the Euro and US Dollar have gained and you’ll get less for your money.


We’ll keep you updated on all things foreign exchange whatever happens in the future and promise to continue to bring you the best rates we can on your currencies.

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