Brexit: What you need to know about the 11th December vote

The last few years have seen a lot of market volatility since the Brexit referendum, and things are likely to heat up once again in coming weeks as Parliament votes on Theresa May’s Brexit deal. The Pound tumbled by 20% after the June 2016 vote, and while upcoming events aren’t expected to cause such a dramatic shift, choppy trading is expected. The vote is scheduled to take place on December 11th, and the reason the Pound could be particularly volatile is because some members of the Conservative Party, opposition parties, and the Irish Democratic Unionist Party (DUP) which props up May’s government, have said they’ll be voting against the deal. Only seven Tory rebels would have to vote against the agreement for Theresa May to be defeated. However, in the seemingly unlikely event that the deal is approved, the Pound may gain some favour. 

The vote:

The vote will take place at the end of the fifth day of debates, on Tuesday 11th December. MPs will have the opportunity to vote on amendments before they vote on the final motion, and each vote will take roughly 15 minutes. 

The results:

Another referendum:

If May’s deal doesn’t get approved, there are several ways forward. However, if the vote isn’t supported, it’s likely markets will sell the Pound to buy safe-haven assets instead, like the US Dollar, Japanese Yen, or Swiss Franc. 

Another referendum might be one of the most prominent options, and at present over 40 Labour MPs and eight Tory MPs have suggested they’d back another one. Another referendum can only happen if government legislation is brought forward and a majority in the House of Commons supports it. There has to be legislation passed for a referendum to be put in place. While the Electoral Commission suggests there should ideally be a six-month divider between the legislation and a new referendum, it’s possible it could be rushed through slightly faster, with the quickest scenario expected to take 22 weeks. It’s worth noting another referendum would require a Brexit delay, which could only happen if all 27 EU member states agreed to it. 

A general election:

A general election is another possibility, but there’d have to be an extension on Britain’s negotiating period to allow time for such a move to take place. If two-thirds of MPs vote for an election, one could take place in just over a month. Another way to force an election would be if a vote of no confidence in the government took place, and a majority supported it. 

A no-deal Brexit:

If a no-deal Brexit were to occur, the Pound would likely plummet, and the economic impact on the UK could be extreme. Bank of England (BoE) Governor Mark Carney has stated before that house prices could fall by a third, the Pound could reach parity against the US Dollar (GBP/USD), and food prices could rise by 10%. 

Protecting your money

It’s worth remembering that political predictions can be wrong, and markets can react incredibly quickly, resulting in sharp movements. Markets don’t like uncertainty, and the prospect of political chaos could create some major Sterling losses. Our team of experienced currency Dealers have helped our clients send money abroad during some of the most volatile political events, including the Global Financial Crisis, general and snap elections, and of course, the Brexit referendum. If you need to move money overseas, speak to one of our currency experts today to find out how you can protect your funds and maximise your transfers. Call us on +44 (0)20 7989 0000.