Someone's stacking bets a hard Brexit will make BOE slash rates

Daniel Fowler
September 20, 2019

The currency had rallied to a six-week high on Tuesday of $1.2528 on the back of optimism that Prime Minister Boris Johnson was trying to secure a Brexit deal with the European Union before the October 31 deadline.

Juncker said he and Johnson made no progress when they met earlier this week.

The bank's next scheduled interest rate decision is November 7, a week after the scheduled Brexit date.

"I have been very surprised by the market's lack of desire to position for BOE cuts with conviction", said Peter Chatwell, a strategist at Mizuho International Plc.

The government's opponents argue that Johnson illegally shut down Parliament just weeks before the country is due to leave the 28-nation bloc for the "improper purpose" of dodging lawmakers' scrutiny of his Brexit plans.

Lawyers for Gina Miller and joint campaigners challenging the suspension told the Supreme Court on Tuesday there was "strong evidence" the British PM saw MPs "as an obstacle" and wanted to "silence" them.

The legislature was prorogued, or suspended, on the 10th of September after Johnson formally advised Queen Elizabeth that he needed it shut down for five weeks so he could prepare to introduce a new legislative agenda.

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The UK Supreme Court is now hearing the government's appeal on the ruling from Scotland's highest court that the government's suspending of parliament was illegal.

Britain's highest court heard arguments for a second day Wednesday on whether Prime Minister Boris Johnson's decision to suspend parliament was unlawful or not.

Most likely, although not a certainty, it will agree with the recent court rulings seen in England and Northern Ireland, that the matter was "non-justiciable" - being political rather than a legal matter.

In addition to rejecting the divorce deal, Johnson's negotiators have asked that Britain be allowed to widely diverge from European Union rules after Brexit, all while securing a highly ambitious trade deal with Europe.

European Commission President Jean-Claude Juncker said there was a "palpable" risk of a no-deal Brexit and progress on replacing the backstop could not be made to reach a deal until the United Kingdom submitted written proposals.

"That is why the risk of a no deal is palpable, remains real and is going to come down to a decision by the UK", Juncker said.

The EU parliament today adopted a non-binding resolution supporting another extension to the Brexit deadline if Britain requests it.

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