Sterling retreats as markets await Theresa May’s crucial Brexit cabinet meeting
Sterling sunk back below $1.30 early this morning despite the Prime Minister having reached a draft agreement with the EU over Brexit.
The pound rose on the announcement late yesterday but fell back to $1.296 this morning as politicians reacted negatively to the deal.
The DUP has cast doubt over Theresa May’s proposed agreement, calling it a “humiliation”.
Hardliner Sammy Wilson said the DUP will not vote for the deal, which would reportedly tie the UK into a temporary customs union with the EU if the Irish border issue is not resolved by the end of a 20-month transition period.
All of the great and the good who were rolled out during the #EURef will be rolled out again in the coming weeks to try and get us to fall into line. We are clear – we will not be voting for this humiliation!
— Sammy Wilson MP 🇺🇦🇬🇧 (@eastantrimmp) November 14, 2018
The DUP, which supports May’s minority government in parliament, claimed the deal could lead to the break-up of the UK, while May has come under fire from Brexiters in her party.
Former foreign secretary Boris Johnson said yesterday: “For the first time in a thousand years, this place, this parliament will not have a say over the laws that govern this country.”
May will have to win support from her cabinet in a meeting scheduled for 2pm today, and then push the deal through parliament despite anger from those in her own party, the DUP, and other politicians pushing for a second referendum.
If the cabinet does back the deal, then EU ministers will get their say on it in Brussels next week, and they may line up a special summit to held before the end of November to sign off on the agreement.
Emily Nichol, economist at investment bank Daiwa Capital Markets Europe, said even with some possible cabinet resignations, ministers are expected to back the agreement.
"The main obstacle will be the UK parliament, where it remains highly uncertain whether May will garner enough support for this withdrawal agreement," she added. "And if parliament rejects this deal, then it will be back to the drawing board, with little time left to agree a different approach and with a government holed below the waterline."