The pound has slumped by more than 1 percent against the dollar after the British Attorney General‘s assessment of Prime Minister Theresa May’s reinforced expectations that lawmakers will reject it.
In a letter outlining his thoughts over May’s latest Brexit deal, Geoffrey Cox said the latest concessions from the EU don’t eliminate the risk the country will remain entwined with the EU customs union indefinitely.
His advice suggests that many lawmakers who have opposed May’s deal are unlikely to change the way they vote in Parliament later. That raises the prospect of more uncertainty, including a potential delay to Brexit.
Minutes after Cox’s advice, the pound was 1.1 percent lower at $1.3014, almost two cents down from where it was earlier.
David Cheetham, chief market analyst at XTB, said it now “looks like any hopes of an unlikely victory for the PM’s deal later have just been extinguished.”
Britain’s attorney general says changes to the Brexit divorce deal secured by Prime Minister Theresa May don’t eliminate the risk the country will remain entwined with European Union rules indefinitely.
Geoffrey Cox says the changes “reduce the risk that the United Kingdom could be indefinitely and involuntarily detained” in a part of the withdrawal agreement known as the backstop.
But he says they don’t give the U.K. an “internationally lawful means” of getting out of the arrangement without the EU’s approval.
The opinion is a blow to May’s hopes of persuading pro-Brexit lawmakers to vote for her deal in Parliament on Tuesday.
The Brexiteers feel the backstop, designed to maintain an open Irish border, could trap Britain in lockstep with EU rules.
Germany and other EU nations welcomed the overnight agreement reached between European Commission President Jean-Claude Juncker and British Prime Minister Theresa May as a last-ditch effort to avoid a chaotic Brexit at the end of the month.
Arriving in Bucharest, most EU European affairs ministers were upbeat about the deal which will be voted upon by the U.K. parliament Tuesday night.
Germany’s EU affairs minister, Michael Roth, called it “a far-reaching compromise. For the EU it’s of utmost importance that the integrity of the single market be preserved, and that there be no hard border between Northern Ireland and Ireland.”
He called on the House of Commons to accept the deal “because I don’t see further chances for negotiations.”
Dutch Prime Minister Mark Rutte tweeted that he was “pleased with the agreement” and implored that British legislators approve the deal. “An orderly #Brexit is crucial for both the EU and the UK,” Rutte tweeted. “There is no alternative.”
European Affairs Minister George Ciamba of Romania, which has the EU presidency, held out “hope this will be a game changer…but we shouldn’t pre-judge the outcome of the vote in the Commons…a disorderly exit would be the worst scenario.’
Luxembourg Foreign Minister Jean Asselborn called it “the last chance to avoid a no-deal.”
British Prime Minister Theresa May is facing continued opposition to her European Union divorce deal despite “legally binding” changes that she hopes will win parliamentary support for the agreement.
The House of Commons will vote later Tuesday after last-minute talks with the EU produced assurances that May said means the deal couldn’t be used to tie Britain to the bloc indefinitely.
Both Keir Starmer, the opposition Labour Party’s Brexit spokesman, and Conservative lawmaker Dominic Grieve expressed skepticism about whether May had won substantive concessions.
May flew to Strasbourg, France, late Monday for talks with European Commission President Jean-Claude Juncker. At a news conference, they announced changes designed to overcome lawmakers’ concerns about provisions designed to ensure the border between EU member Ireland and Britain’s Northern Ireland remains open after Brexit.