Stunning financial markets, the UK High Court has handed down a ruling insisting that MPs must form a majority to approve any move to exit the European Union. Although the government has promised to appeal the ruling, with another hearing scheduled in December, the move significantly reduces the negotiating power of Prime Minister Theresa May’s administration. The kneejerk reaction in the Pound was to the upside as the decision could prevent an exit altogether if MPs from the House of Commons fail to find a majority in favor of exiting. Helping the Pound appreciate further versus peers was the subsequent decision from the Bank of England to maintain interest rates at 0.25% while removing language related to forward guidance for interest rates. With no further rate cuts forecast at this time, the Pound has further room to appreciate over the near-term.
Brexit Faces a New Hurdle
Daily Analysis - 04/11/2016