Another week, another set of Brexit plot twists! The next few days shouldn’t be any different, so let’s gather ’round and look at what might happen next.
PM May’s Plan B (Jan. 21)
Last week’s Brexit episodes featured a rejection of the transition deal (no surprises there!), a no confidence vote, and a narrow victory by PM May. It ended with the quite the cliffhanger, leaving market watchers guessing about a potential extension of Article 50, a second referendum, or ultimately a “no deal” Brexit.
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Over the weekend, PM May was probably busy burning the midnight oil coming up with a plan B to present to parliament today. Word through the grapevine is that the cabinet still hasn’t been able to come up with a solution to the Irish border backstop issue, so strong opposition could still be expected.
This might leave No. 10 with no choice but to ask for more time (a.k.a. an extension of Article 50) from EU leaders in order to renegotiate the Brexit deal on the home front.
If EU leaders aren’t open to this idea, the odds of a “no deal” Brexit could increase. Then again, this outcome is also something that would be in the EU’s best interest to avoid.
With that, an extension of Article 50 doesn’t necessarily guarantee that PM May can put forward a deal that can eventually be approved by parliament within the time frame. Some say that this could give rise to a second referendum, which ups the possibility of backing out of Brexit, or even a Norway-style arrangement.
U.K. jobs data (Jan. 22, 9:30 am GMT)
Pound traders might be able to pry their eyes and ears away from Brexit as the U.K. is due to release its latest jobs figures.
The claimant count change for December is slated to be lower at 20.1K versus the earlier 21.9K increase in joblessness. Meanwhile, no changes are expected for the average earnings index at 3.3% or the unemployment rate at 4.1% for the period ending in November.