The British pound rose on Monday as investors prepared for parliament to vote on a series of Brexit options, with some hoping that the current uncertainty will end in a softer Brexit than Prime Minister Theresa May’s defeated withdrawal agreement.
May’s deal was voted down for a third time by lawmakers on Friday, sending sterling plunging to below 1.30 dollar.
But the British currency has held at or above that level since, suggesting some investors have priced out the prospect of Britain crashing out of the European Union without a deal and instead expect a long delay to the exit or Brexit to emerge eventually where closer ties are maintained to the trading bloc.
“There is a growing expectation that a (House of) Common’s majority could coalesce around a softer Brexit that includes a custom’s union but she is facing more threats from cabinet members to resign if she decides to pursue a softer Brexit,” MUFG analysts said.
Sterling rose 0.4 per cent to 1.3083 dollar, also finding support from better-than-expected manufacturing survey data.
The pound gained 0.1 per cent to 85.980 pence per euro.
The analysts at MUFG said that while a no-deal Brexit on April 12 remained a risk for the pound, an emergency EU summit on April 10 could – if British lawmakers cannot agree anything this week – see a long delay to Brexit.
Parliament will vote on different Brexit options on Monday and then May could try to bring her deal back to a vote in parliament as soon as Tuesday.
But May’s government and her party remain in open conflict.
Marshall Gittler, a strategist at ACLS Global, said he considered a no-deal Brexit “as a higher possibility, even though it’s officially been ruled out, simply because I don’t see any of the other endings as particularly possible.”
The IHS Markit/CIPS UK Manufacturing Purchasing Managers’ Index in at a reading of 55.1 for March, above the 51 level forecast by economists polled by Reuters.
The survey showed that factories in Britain stockpiled for Brexit at a frenzied rate last month, pushing manufacturing growth to a 13-month high.
“It just needs to be sorted,” said 23-year-old Adam Green, a frustrated Leave voter in Brexit-backing Sunderland, where patience with parliamentary delays over Britain’s departure is wearing thin.
The former shipbuilding city in northeast England, where the Nissan carmaker plant is now the lifeblood, played a starring role in Britain’s seismic decision to leave the European Union.
The city’s 61 percent vote in favour of leaving in the 2016 referendum signalled early on where the nation was heading on the night of June 23, 2016 and celebrations at the count were beamed worldwide.
Now, as MPs prepare for Tuesday’s decision on whether or not to back the divorce deal struck between London and Brussels, voters in Sunderland are urging them to get on with it and get Britain out.
The years of wrangling since the referendum over how, or even if, Britain leaves have certainly dampened the high spirits of that 2016 June night.
“It’s become an absolute joke,” said Green, who is unemployed for medical reasons, as he stood outside the Bridges main shopping centre.
“It’s disrespecting my vote completely. Myself and my whole family voted for us to come out,” he said.
“The MPs need to get their heads down and get us out.
“I just want it over and done with because I’m sick of hearing about Brexit,” he added.
The University of Sunderland campus was built in the 1990s on the site of former shipyards that once dominated the banks of the River Wear in this working-class city of 275,000 people.
Sunderland was a coal trading port, had its own collieries, was a glassmaking centre and boasted a major brewery.
The heavy industry has largely evaporated, though the docks are still going and ships’ horns echo amongst the cranes.
– ‘Anti-elite feeling’ –
Besides its current carmaking prowess, Sunderland’s pride now rests on its football team.
Despite two straight relegations to the third-tier League One, the Black Cats still draw huge crowds to games at their 49,000-seater Stadium of Light, built on the site of a disused coal mine.
On match days, the stadium roar drifts throughout Sunderland’s streets.
“Sunderland is a city where people feel quite rooted, with a strong sense of community,” said Peter Hayes, the university’s senior lecturer in politics.
“That perhaps makes them feel a little bit less cosmopolitan,” he told AFP.
“There’s a kind of anti-elite feeling in Sunderland,” he said, explaining the Leave vote — which went against Japanese automaker Nissan’s preference.
“If we leave the EU on bad terms, there are very serious economic problems that Sunderland is going to face,” he added, saying that if Nissan shifted production to Europe, it would be a “disaster”.
Britain’s largest car factory employs more than 7,000 workers and builds 500,000 vehicles per year, including the Juke, Qashqai and electric Leaf models. Some 55 percent are exported tariff-free to the EU.
Stephen O’Brien, a city councillor for the pro-EU opposition Liberal Democrats, said a no-deal Brexit’s effect on the city’s manufacturing would be “more devastating than losing the pits and the boat industry”.
– ‘Out on a limb’ –
Strolling along Roker Beach, a sweeping bay where kayakers brave the chilly North Sea, 67-year-old Brian Halse said: “It’s just a shambles. I did vote for Brexit. I would like us to go out. I think we’re better off by ourselves.
“I like (Prime Minister) Theresa May but nobody’s backing her the way they should. We should all stick together and go out the best way we can.”
Ronnie Quinn, 60, picking litter on the riverbank by the Wearmouth Bridge, said MPs were “acting like children” instead of upholding the referendum result.
“I voted to leave — and we won. The country’s made a choice and they should all be working together to shift Britain out,” he said.
“I would prefer no deal. The country did all right before the EU.”
But Liz Sulaiman, 74, out walking her dog on the seafront, said she was more worried about the effects of a potential no-deal Brexit on her grandchildren.
“Sunderland’s already not doing so well so I don’t think it’s going to do any better,” the housewife said.
“You’re going to lose a lot of jobs. We don’t need that in the northeast. It’s all happening in the south; they don’t seem to care about us. We’re just out on a limb and if we lose Nissan, we lose an awful lot.”
© 2019 AFP