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The British Pound Takes A Pounding

Sep. 04, 2019 10:52 AM ETFXB, EWU, GBB-OLD, FKU, HEWU, DGBP, UGBP, FLGB2 Comments


  • 31st October 2019 is the deadline for Brexit.
  • PM Boris Johnson has prorogued Parliament.
  • A No-Deal Brexit is likely.
  • The British pound sterling has suffered.

The Deadline

The 31st of October is the most likely date for a final decision on Brexit. It's ironic that Halloween (All Hallows` Eve) should be the deadline for Brexit. It seems that the EU might be taunted with the traditional “Trick or Treat” since it's not clear what Parliament is going to do. The EU is unlikely to grant any further postponement of the date for the exit of the UK from the EU.


Prime Minister Boris Johnson has made the political move of proroguing Parliament until the 15th of October 2019. This gives Parliament very little time to do anything before the 31st October deadline. It should be clear that the Queen formerly acquiesced in the Prime Minister`s request as a matter of course since the Queen practically has to give her consent to the Prime Minister`s request and the proposal should be understood to be a political move on the part of the Government.

Proroguing Parliament, which means adjourning Parliament for a certain period, is not at all a revolutionary attempt at subverting the Constitution. It has been done various times in the past. Prorogation means that the MPs go home and Parliamentary work is suspended. An election is not necessary. In this case prorogation means that MPs against a No-Deal Brexit would not have sufficient time to put through legislation blocking either any agreement reached by the government with the EU or a No-Deal Brexit. At the time of writing, 3rd September 2019, the opposition promises to promote legislation blocking a No-Deal Brexit or to propose a no confidence vote with the intention of blocking a No-Deal Brexit. There also are rebel Tory MPs against prorogation. If there's a no confidence vote that has a majority, then Johnson will have to call an election. The outcome of this initiative is uncertain. Whatever Parliament does, the deadline will not be

This article was written by

B.A., M.A., University of Pennsylvania,; M.A., (Oxon.); Ph.D. Princeton University Currently CEO of WWS Swiss Financial Consulting SA

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