May Fights to Contain Brexit Crisis After Key Ministers Quit
Comment of the Day

July 09 2018

Commentary by Eoin Treacy

May Fights to Contain Brexit Crisis After Key Ministers Quit

This article by Thomas Penny, Kitty Donaldson, Robert Hutton and Tim Ross for Bloomberg may be of interest to subscribers. Here is a section:

“The dream is dying, suffocated by needless self-doubt,” Johnson wrote. “It is as though we are sending our vanguard into battle with the white flags fluttering above them.”

Straight after her Commons appearance, May went to a packed meeting of rank-and-file Tory lawmakers, where she spoke and took questions for an hour about her plan. There were some voices of dissent during the gathering, one lawmaker said as he left the room, though the end was marked by loud cheers.

Geoffrey Cox, who campaigned to leave the EU, said he can offer May’s proposals to voters with a clear conscience. “This deal does represent a giant step out of the EU,” he said after the meeting. “If I didn’t think so, I wouldn’t support it.”

But Jacob-Rees Mogg, chairman of the pro-Brexit European Research Group, warned that May would split her party if she relies on opposition Labour votes to get her plan through Parliament. The premier’s team briefed Labour Party lawmakers on Monday in an apparent effort to try to count on their support if her own side lets her down.

Eoin Treacy's view

The UK is still grappling with widely differing visions for what a post Brexit situation will look like and the fact that there has not been an immediate call for a vote of no confidence in Theresa May highlights just how tenuous the Party thinks its hold on power is if an election were to be called.

The Pound pulled back against the Euro to retest the €1.12 level but rebounded following May’s speech. This volatile range has persisted since September but in that time a progression of higher reaction lows has been evident. That suggests that the overall bias of trading is skewed towards a scenario where the UK remains closer to the EU than the Brexit camp campaigned for. Upside follow through tomorrow would confirm a low of short-term significance.

The FTSE-100 bounced from the region of the trend mean and a sustained move below that level would be required to question medium-term scope for continued upside.  

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