The British Supreme Court has ruled parliament approval is needed before triggering the official start of the two year Brexit negotiations with the EU.
The UK Prime Minister Theresa May must therefore table a bill and win a Commons vote before she can trigger Article 50. This means the UK parliament could legally decide not to enforce the referendum vote or even call for a second referendum on the matter, although it is unlikely MPs will defy the will of the electorate in regards to Brexit.
According to Hussein Sayed, FXTM chief market strategist, the Supreme Court ruling does not mean that Brexit will not come into action.
“It’s just going to slow the process and add a few more complexities,” Sayed said.
According to BBC, however, delays in triggering Article 50 beyond May’s end-March deadline are not likely, as the bill to trigger Article 50 do not need to take too long — it is likely to be a very short bill with only one or two clauses.
“The British people voted to leave the EU, and the government will deliver on their verdict – triggering Article 50 as planned – by the end of March. Today’s ruling does nothing to change that,” a spokesman for Number 10 said following the Supreme Court ruling.
The pound has dropped slightly after the government lost its Supreme Court appeal on whether Parliament must vote on starting the Brexit process.
The pound is 0.6% lower against the dollar at $1.246. Before the judgment sterling was above $1.25 at a five-week high. Against the euro, sterling is 0.3% lower at €1.160.
“Sterling is likely to remain volatile and range bound in trading in 2017, as details of the government’s negotiations with the EU trickle through to the public. Although range bound, investors will have plenty of opportunity to get exposure to the pound, as it is likely to be a wide range – from 1.21-1.27 against the US Dollar,” said Martin Arnold, director of FX & Macro Strategist at ETF Securities.