Political risks in the UK increase the chances of Brexit without a deal
After the next proposal of the British Prime Minister Theresa May for Brexit failed, the recent supporters of the May government began to abandon their views in support of the current British government.
On May 21, T. May proposed to hold another referendum on a deal with the EU. In fact, by doing so, T. May wanted to bypass the majority in parliament, which does not support this deal.
Impact on the British pound
Against the background of such a statement, the British pound received a considerable support against most competitors. But this movement was largely due to the correction of positions on the possibility of approval of this decision. And you should not miss the possibility of misinterpreting the statement about the new referendum on Brexit.
Fig. GBP/USD chart with market reaction to a new UK referendum
The next proposal of T. May failed in voting not only among the opposition party, but also among its own members. This caused a new wave of sales of the British pound with a new force.
In addition to another failure of the deal by the UK government in the person of Prime Minister T. May, she found herself in considerable political uncertainty after one of her ministers resigned. Following this, there were demands for the resignation of the Prime Minister.
Thus, the head of the parliamentary “Committee of 1922,” Graham Brady, announced that he would announce a vote of no confidence in Prime Minister T. May, if she did not announce the date of her resignation on May 24. Due to it the political uncertainty in the UK intensified even more and on the situation with Brexit.
Brexit risks are replaced by political
If the British government turns out to be without a prime minister, and this is where it goes, there is a high probability that a new prime minister will become a person less interested in Brexit. This is indicated by the decline in the number of fans leaving the UK from the EU.
In addition, with a removable prime minister, the probability of postponing a Brexit date to a later date will increase sharply. This can happen because of bureaucratic moments and the rules for changing the prime minister.
Of course, it is worth noting that in the conditions of a similar development of events, there wouldn’t be a Brexit deal, which May promotes. Not to mention the fact that the British exit from the EU may not take place, since the majority in the UK government would prefer to cancel Brexit more than exit without a deal.