Brace yourselves for MV 2.5 later today
It's all gone bonkers in Brexit-land overnight as everyone got blindsided by a technicality that saw the pound fall even more as Theresa May looks to bring only half of her Brexit deal for a vote later today. What she has basically done is split it into two halves, the first being the withdrawal agreement and the second being the political declaration - which lays out the future relationship between the UK and the EU.
For today's vote, the withdrawal agreement will be the main focus and if lawmakers approve of it, then the Brexit deadline will get pushed to 22 May instead. That will give May several more weeks to try and find a compromise/solution to end the whole debacle.
But whether or not she succeeds today, there's still the possibility of indicative votes going through again on Monday. Though it's more likely if she fails that this will then be the next course of action by parliament.
So, what are May's chances of passing the vote today?
Despite only bringing half of it to the table, the odds are still very much stacked against her. May has vowed to resign if her deal passes but so far that gambit hasn't been enough to sway enough Brexiteers and more importantly the DUP to rally behind her deal.
I mean she has convinced some lawmakers to jump ship but so far the numbers are still falling short.
Hence, should today's vote fail then we're either headed for a no-deal Brexit on 12 April or a long extension with prospects of no Brexit at all likely to increase; that is of course if parliament cannot reach a majority via indicative votes. And even if they do, it remains to be seen if May and the government will honour that decision.
In conclusion, there's still plenty of uncertainty up in the air and lots more of the Brexit mess still to sort out in the meantime. If May's vote fails today, it's tough to indicate how the pound will react. On one hand, it increases the chance of leaving without a deal on 12 April. On the other, it also increases odds of a long extension.
The simplistic way to look at it is that the pound will fall on headlines that May loses the vote - even if it is expected - but gain ground as the realisation sets in that a long extension is seen more likely with parliament to do all they can to prevent a no-deal outcome. But we all know that trading Brexit headlines has never been a straightforward ordeal.
Parliament debate begins later at 0930 GMT before the vote on MV 2.5 comes about at 1430 GMT. So, make sure to keep your eyes and ears peeled throughout the morning.
