What's going on?
The UK Parliament rejected the deal negotiated for its departure from the European Union (EU) for a second time on Tuesday, with all eyes now turning to two more votes scheduled later this week (tweet this).
What does this mean?
Late on Monday, the British prime minister secured additional “legally binding” changes from EU negotiators to the Brexit agreement comprehensively rejected by parliament back in November. These are intended to ensure that keeping the UK’s land border with neighboring EU member state Ireland open doesn’t leave Britain bound to EU rules indefinitely.
But on Tuesday, the government’s top lawyer said that, actually, the changes weren’t quite “legally binding” enough – and parliament subsequently vetoed the Brexit deal once again. There’ll now be another vote on Wednesday on whether to entertain the prospect of a no-deal Brexit – and if that too is rejected, there may be another vote on Thursday on whether to seek to delay B-Day on March 29th.
Why should I care?
For you personally: Hold fast.
Back in January, investment bank Citigroup advised its “private banking” customers – typically $25 million better off than your average bear – to give the British pound a wide berth, saying political uncertainty made it too risky to either buy or sell. With Brexit now up in the air, many analysts and investors warn that predicting what might happen next for Britain’s currency, companies, and countrymen is simply too tough. The only certainty is volatility…
For markets: Wave someone else’s flag.
When the pound falls, UK stocks typically rise: they appear cheaper to international investors. Some might take that opportunity to snap up shares of those companies which do most of their business back in Blighty, as these are less likely to be affected by any international argy-bargy. And those investors might also be encouraged by data out on Tuesday which showed the UK economy bouncing back slightly in January, posting its best monthly growth figures in two years.