Brexit-deal rejected – stocks gaining in US

The UK Parliament has rejected the Brexit-deal with numbers 432-202. Prime Minister Theresa May and the other supporters fear that this could lead to a disorderly exit from the EU. According to the plan, the UK should leave the EU on March 29th.

After years of negotiations and fierce debate in the Parliament, the historic vote today means that the UK is now in a political crisis. The Labour leader Jeremy Corbyn said that he will ask for a vote of confidence, which will be tomorrow on Wednesday.

According to Reuters, the Cabinet ministers are still having a confcall tonight with the UK business leaders about the Brexit-vote and what does it mean to the business and City.

The EU has said that there will be no emergency summit beause of the situation. The EU leaders also confirmed that the deal, which was negotiated in November, will not be reopened.

The UK sterling was trading about 0,04 % up at 1,286 against to dollar. Euro was down by 0,49% to 1,14 dollars.

The US stocks were all up and Dow Jones showed 0,41 % to 24 008 points, S&P 500 -index was up 0,96 % to 2607 points and Nasdaq 1,47 % to 7007 points. In London the FTSE 100 ended up 0,73 % to 6895 points. In Germany the Dax-index ended up 0,33 % to 10891 points and in France the CAC 40 -index 0,49 % to 4786 points.

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Brexit: Is there democracy?

After several months fierce debate over the Brexit agreement and its content, the next week will be historic for the UK economy and the country´s citizens. The Parliament is voting on Tuesday about the Brexit-deal and it will then give more guidance, how the Brexit-deal is going further and how the exit will happen on March this year.

The UK Prime Minister Theresa May and the Bank of England have warned of the non-deal Brexit. This means that if the Parliament rejects the negotiated Brexit-deal by the PM, this would be the worst scenario for the UK´s economy and its citizens, according to Central Bank´s analysis. The analysis, which was published in December, highlights that this would mean dramatically lower property prises, market volatility and  severe difficulties in trade for goods and services.

Today on Sunday, the PM Theresa May wrote in Sunday Express about her feelings and thoughts. Her message was clear: “It is time to forget the games and do what is right for the country”. She also pointed that by rejecting her Brexit-deal would mean that the Parliament has forgotten the original Brexit-vote and thus undermined the deomocracy.

In the BBC TV Labour leader Jeremy Corbyn told in today´s interview that his own view is that he would rather get a negotiated deal now and stop the danger of a no-deal exit from the EU.

Also the Japanese Prime Minister Shinzo Abe, who was visting the UK Cabinet last week in the UK,  sent his greetings that “the whole world want UK to avoid no-deal Brexit” and gave his full-support for the UK-EU deal.

Theresa May and her Cabinet have been discussing with the EU leaders about the Irish border issue ( a new physical border)  during the December and January time. This issue is sensitive for the UK, while the critics see this border issue as an binding element for the UK to follow the EU rules forever.  The new border would be between the Northern Ireland and the Republic of Ireland.

The UK economy saw the worst Christmas sales for years while the consumer confidence was weak due to Brexit. The UK economy is like in a war situation: the inventories are been filled with foods and drugs if the non-deal Brexit would cause chaos in the customs during the spring time. Travellers have been warned for the longer waiting times in the customs.

According to the Band of England´s Governor Mark Carney, the banks and the banking system are prepared for the worst, if this would be the case.

So, what to expect from the next week? The market volatility is expected to continue, but the traders and markets are looking for the Tuesday  UK decision until they make any big decisions. The markets are doing the thing PM May wished for today.

 

 

Business Finance