Brexit update: May to seek “legally binding change" to backstop from EU

The latest update on Brexit is that we are back to square one. Today, the UK Prime Minister told parliament that she will seek to re-open negotiations on the Withdrawal Agreement with the EU in order to get a "significant and legally binding change" to the Northern Ireland backstop arrangement. She is expected to hold talks with EU leaders on this issue ahead of parliamentary votes on 7 amendments to her Brexit bill from 19:00 GMT tonight.

However, the EU has already insisted it will not be willing to change the agreement. So, it remains to be seen where the UK Government will go with this. But now that Mrs May has a clear mandate from the parliament, the EU might – just might –  agree to a legally-binding change to the backstop arrangement. If so, then those rebel Brexiteer MPs who voted against May’s deal last month may be willing to change their views when we have the second “meaningful vote” at some point in the not too distant future.

Understandably, the pound dropped in reaction to today’s “news” from UK parliament, as investors wondered what all this means. The losses were contained, however, as today’s so-called “developments” were expected. All told, the possibility of a delay in Brexit beyond the March 29 still looks likely. The potential delay could give rise to a second EU referendum.

Related tags: Brexit Forex GBP/USD Forex

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