Post days of hard negotiations, recently the British Prime Minister Boris Johnson was able to re-negotiate a deal with the European Union. However, he was not able to proceed further as his government’s key ally, the Democratic Unionist Party of Northern Ireland, immediately rebuffed the deal he managed to secure with the EU bloc. This was again a big setback for Boris Johnson's government to get the deal approved and passed through the House of Commons.
Earlier, the British Prime Minister had hoped that on October 19, 2019 (Saturday), defiant parliamentarians would support the Withdrawal deal he had re-negotiated with the EU lawmakers and finally end more than three years’ long economic and political deadlock. However, MPs in the House of Commons voted 322 to 306 and went against PM Johnson’s expectations to support an amendment calling for approval of the legislation around the deal first. This exposed PM Johnson’s to a humiliating obligation to ask the EU for a further Brexit extension until the end of January 2020 and provided an opportunity to the opposition to delay the process further.
While addressing the House of Commons on October 19, 2019 (Saturday), PM Johnson said that "this deal will provide for a real Brexit, allow us to trigger control over our borders, laws, money, farming, fisheries and trade. It removes the backstop holding the country against its will in much of the single market and the customs union. For the first time in almost fifty years, the UK will be able to negotiate free trade deals with friends across the globe, which will benefit Northern Ireland in addition to the whole country.”.
Since Boris Johnson took charge as British Prime Minister, he kept on insisting that he will take the UK out of EU bloc with or without any formal arrangements on the scheduled Brexit date of October 31, 2019. But after the British Parliament forced Boris Johnson to comply with the terms of the Benn Act, he struck a defiant note.
He told Parliamentarians that, “I will not arrange a further Withdrawal extension with the EU members and neither law compel me to do so, I will communicate the same to my EU friends and colleges what I have communicated to everyone else during my past 88 day tenor as the British Prime Minister, that a further Brexit extension would be wrong for the UK economy and for the EU bloc as well”.
However, in response to the Prime Minister's statement, Jeremy Corbyn, the Leader of Opposition in the House of Commons said "The re-negotiated the Brexit deal is even worse. Today, the House is debating a deal which has not accompanied by a legal advice and has also not been subjected to impact assessment.”
Meanwhile, the UK's Government made it clear on October 20, 2019 (Sunday) that the UK will crash out of the EU bloc on the scheduled October 31, 2019, despite a letter that the British Prime Minister was compelled by parliamentarians to send to the EU bloc seeking a further extension to Brexit. PM Boris Johnson sent an unsigned note to the EU requesting the same. It was also enclosed with another signed letter claiming what he believes in the wake of a further possible extension.
One of the most senior ministers in Boris Johnson's cabinet said that the UK would leave the bloc on the scheduled withdrawal date of October 31, 2019. He also added that the letter was sent because Westminster required it to be sent, but MPs cannot change the PM's mind, nor can they weaken the government's determination.
The PM wrote in the third letter that was sent to the EU bloc, that, “I have cleared my stance since I took charge of the Prime Minister’s office and clearly presented mine and my government’s view that, further delay would severely damage the interests of Britain and EU partner countries and relationship that exists between us”.
Meanwhile, French Junior Economic Minister Agnes Pannier-Runacher commented that it is possible for the UK to get out of the EU region with the next 10-days; she also added that normal progress has commenced, but many small French firms still had to execute more work in order to be ready in the case of a no-deal kind of Britain's exit from the EU.
However, benchmark indices in the UK commenced on positive note on Monday October 21, 2019 with almost every major index at the London Stock Exchange hovering in the green. The benchmark FTSE 100 index, a portfolio of 100 large corporations listed and traded at the LSE, added 12.18 points or 0.18% against the previous closing session and quoting at 7,163.35 and registered an intraday high of 7,198.35 and an intraday low of 7,142.05 (at the time of writing as on October 21, 2019, before the market close at 10:40 AM GMT); the mid-cap index, FTSE 250 added 20.02 points or 0.10% and quoting at 20,247.37; the FTSE All-Share bagged 4.02 points or 0.44% to reach 884.58. However, the FTSE TechMARK Focus is the only index at the LSE which was moving in the red and fell off 64.22 points or 1.22% to 5,189.75.
However, the UK market is still in a downtrend as the broader FTSE 100 index is still trading well below its 50-day, and 100-day Exponential Moving Averages (EMA) and 14-day Relative Strength Index is also down-trending. For the FTSE 100, 7,278.51 and 7,257.08 are the two crucial resistance levels for the index to breach.
Well, there are many uncertainties related to Brexit related which are hovering in the UK and this makes it really tough for anyone to predict the market trend in near-term. What step the British PM is going to execute next should be analysed prudently before taking any long or short position in the market.
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