Today, the pound slumped against the euro and the US dollar after the Brexit deal of British Prime Minister Theresa May was rejected by parliament for the third time and the European Union warned a that no deal Brexit scenario is now “likely.”
Today, the MPs voted for a third time on whether to approve the withdrawal agreement that was negotiated with the bloc. As expected, Theresa May’s deal was defeated by a margin of 58.
The pound laid flat against the euro and up by 0.1 percent against the dollar ahead of the vote, however, sterling was down by 0.4 percent against the euro to €1.15 and down by 0.3 percent against the dollar to $1.29 in the immediate aftermath of the vote.
It came as the European Union warned that the United Kingdom was now likely to crash out of the bloc with no deal on the 12th of April.
In a statement as a response to the vote, The European Commission stated: “The Commission regrets the negative vote in the House of Commons today.”
It added: “A “no-deal” scenario on 12 April is now a likely scenario. The EU has been preparing for this since December 2017 and is now fully prepared for a “no-deal” scenario at midnight on 12 April. The EU will remain united. The benefits of the Withdrawal Agreement, including a transition period, will in no circumstances be replicated in a “no-deal” scenario. Sectoral mini-deals are not an option.”
After her deal was rejected, PM May warned that there is not enough time for an alternative deal to be ratified and pass through parliament. Now, Britain will likely ask the bloc for another extension to the Brexit timeline even though there is no guarantee that it will be granted as it would mean that the United Kingdom would have to take part in European parliamentary elections scheduled in May.
As a response to Friday’s vote, the CEO of the manufacturers’ organisation Make UK, Stephen Phipson, stated: “This now makes the nightmare of a “no-deal” scenario more likely than ever.”
He added: “This would be a disaster for the UK economy as a whole and for the 2.7 million manufacturing jobs around the UK.”
In a statement, the chairman of the Federation of Small Businesses (FSB), Mike Cherry, said: “On the day that we were supposed to be leaving the European Union, all we have is yet another political failure to chalk up.”
He added: “Responsibility for this deepening political crisis lies squarely at the feet of politicians who have clearly stopped listening to the business community.”