Barely a day to the House of Common vote on Brexit, Theresa May has succumbed to advice from law makers to delay the vote. May (62) signed a draft divorce deal with the European Union in Brussels a fortnight ago and commenced a debate in parliament on 05 Dec to last upto 11 Dec with a vote. May’s chances of a divorce deal nod on the 11 Dec remain very bleak.
May has been opposed by ‘europhiles and euroskeptics’ existing even in her own minority conservative party. May was cited for contempt of parliament for failing to produce ‘full’ legal advice on Brexit consequences.
Various stress tests ranging from the banking industry scenario’s that would see interest rates spike to 5.5% from 0.75%, delays in financial transaction processing and shrinkage in the gross domestic product (GDP) of London by 8% worst case scenario in year one, were presented by the Bank of England led report. The sterling (GBP) could shave upto 25% value to be at par with the dollar if a no deal Brexit results. The Financial Conduct Authority (FCA) the markets regulator also advised on the catastrophic effects such as a savage recession, worse that the one seen in the 1970’s could result. Britain could also lose access to EU security data bases. All these results were dubbed as scaremongering to coerce the vote opposers cited.
Last week the Royal Bank of Scotland applied to the courts to move GBP7 billion in assets and GBP6 billion in liabilities to subsidiary NatWest Bank in the Netherlands if a no deal Brexit results.
Brexit uncertainty has been the biggest driver of pound volatility to 17 month lows.
British entities have started to seek market access in Africa, South America and the United States. This was established at the G20 summit where May was confident the world would do business with Britain after Brexit.
A significant turn of events was when a senior ECJ legal official advised that Britain was under no legal obligation to go ahead with Brexit. Consequences of a poorly executed divorce deal keep thickening and dawning on the Brits on a daily basis. May’s job lies in the balance depending on which final outcome takes the day. If the 585 paged divorce settlement does not pass house of commons popularity test, Theresa May’s days could just be numbered.