Pound tumbles after May aborts Brexit vote

By Chronicle staff and agencies

Sterling tumbled to its weakest since April 2017 yesterday after Prime Minister Theresa May pulled a parliamentary vote on her Brexit deal with the European Union, panicking investors about deepening political uncertainty in Britain.

Mrs May said she was delaying the planned vote as her deal would likely be rejected "by a significant margin".

Colleagues had told Mrs May that she faced a rout in the vote, which was set for today.

The move thrusts Britain's exit from the European Union into turmoil, with possible options including a disorderly no-deal Brexit, another referendum on EU membership, or a last minute renegotiation of Mrs May's deal with Brussels.

Mrs May said she would do all she could to secure further assurances from the EU on the so-called Northern Ireland backstop arrangement, a crucial part of the deal bitterly opposed by many of her fellow conservatives and opposition parties.

Last night European Council President Donald Tusk said Brexit would be discussed at the council meeting on Thursday, including how to help the British government ratify the exit process.

But he signalled that the Withdrawal Agreement was not up for renegotiation.

"I have decided to call #EUCO on #Brexit (Art. 50) on Thursday," Mr Tusk said on Twitter.

"We will not renegotiate the deal, including the backstop, but we are ready to discuss how to facilitate UK ratification. As time is running out, we will also discuss our preparedness for a no-deal scenario."

For Gibraltar, reopening the deal could raise the prospect of Spain seeking to modify the legal text to strengthen its hand over Gibraltar’s inclusion in any future trade deal between the UK and the EU.

Madrid has secured political commitments from its EU partners that it will have a deciding voice over Gibraltar inclusion in any future relationship, but this is not reflected in the legal text.

Yesterday Spanish Foreign Minister Josep Borrell appeared to play down such as prospect, however.

“We’ve overcome the last difficulties about Gibraltar during the last council,” he said.

“I think it is a good deal, it is the best deal and to approve this deal would be a good thing. But for sure it’s up to them.”

Pressed on whether Spain would seek changes in respect of Gibraltar, he added: “Gibraltar? About Gibraltar everything has been said.”

The upheaval in the UK parliament was reflected in the currency markets, where the pound was worth 1.10 euros yesterday evening, a 20-month low.

While the UK Government considers when to next hold a parliamentary vote, it is stepping up contingency planning for a no-deal Brexit when it is due to leave on March 29.

Earlier on Monday, the EU's top court ruled that Britain could unilaterally reverse its decision to leave, easing concerns about Britain crashing out of the bloc in March without a deal.

In an emergency judgment delivered just 36 hours before it expected the British parliament to vote on a Brexit deal agreed with the EU by Prime Minister Theresa May, the Court of Justice (ECJ) said: "The United Kingdom is free to revoke unilaterally the notification of its intention to withdraw from the EU."

"Such a revocation, decided in accordance with its own national constitutional requirements, would have the effect that the United Kingdom remains in the EU under terms that are unchanged."

Mrs May rejects holding a new Brexit referendum but her hold on office is looking shaky.

Labour leader Jeremy Corbyn was urged to do his "duty" and table a no confidence motion in Theresa May after the Prime Minister pulled her Brexit vote.

The Labour leader warned an "extremely serious and unprecedented situation" had emerged after Mrs May pushed back decisions on the Brexit deal, adding: "The Government has lost control of events and is in complete disarray."

Pic by Johnny Bugeja