GBP Holds The Line As May Suffers Historic Defeat

The loss is a major blow to May who has fought tooth and nail to secure a Brexit deal, even abandoning the vote just 24 hours ahead of its originally scheduled date to allow her to travel to Brussels to secure extra reassurances in a bid to persuade those who still held reservations.

Ultimately, her efforts proved not to be enough, and instead of making history for the right reasons, May’s defeat has been confirmed as the largest government defeat in UK political history.

Corbyn Launches Vote of No Confidence

Following the defeat, May challenged Jeremy Corbyn, leader of the opposition party, to submit a vote of no confidence. Following weeks of speculation and veiled threats, Corbyn accepted the PM’s challenge and launched a vote of no confidence which will be voted on in Parliament later today following a debate.

If Corbyn’s vote of no confidence is successful and the government loses support, a two-week period will commence during which time Labor and Conservative leaders will try to form a new administration backed by the House of Commons. After this time, an election will be called which could take place as quickly as five weeks later.

What Happens If Corbyn Fails?

However, if Corbyn’s motion is unsuccessful then focus will shift back onto the next course of action regarding Brexit. Despite the defeat, May can still amend the bill and present it before Parliament again.

However, unless she is able to secure the legally binding concessions from the EU regarding the Northern Irish backstop issue, which the DUP and Conservative party are demanding, May is unlikely to gain the roughly 120 votes needed to swing things in her favour.

Consequently, it seems that the only way in which May is likely to see her deal eventually passed through Parliament on a subsequent attempt is if UK MPs finally concede that May’s deal is better than leaving with no deal.

GBP Remains Resilient

Indeed, the resilience of GBP following news of the defeat suggests that the market suspects that this might be the case, or that Article 50 will end up being extended.

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