This morning, the highest court in the UK rejected an appeal by ministers against a High Court ruling that blocked their decision to trigger Article 50 without parliamentary approval. The pound has fallen on the news, moving back below the 1.25 handle against the US dollar whilst stocks have popped higher with the FTSE 100 recovering from a soft start to turn positive on the day.
Will ruling delay Brexit?
UK PM Theresa May has set a deadline of the end of March for triggering Article 50 and formally beginning the Brexit process, but today’s events threaten to cause a delay. Now a one-line Bill is expected to be drawn up and debated in Parliament, with the government hoping that this will go through both the Commons and the Lords promptly before become law as an Act of Parliament. Whilst this morning’s announcement will not please Mrs. May it is unlikely to ultimately make a large difference and the balance of probabilities suggest that the self-imposed deadline will be met. Leader of the opposition Jeremy Corbyn has already reacted and stated that the Labour Party will not seek to frustrate the process for invoking Article 50 however they will seek some amendments, which they believe will be preferential. The pound traded up to its highest level against the US dollar since mid-December yesterday but the market has reacted negatively to the announcement. This depreciation is largely due to the fact that the government doesn’t have to consult the Scottish, Welsh or Northern Irish assemblies before triggering Article 50 and this absence of devolution removes a potential roadblock which would likely cause a further delay.
BT shares plummet on accounting error
The stock of BT has come under heavy selling this morning with declines just shy of 20% after the telecommunications firm stated that it was forced to write down the value of its Italian business by £530m because of years of inappropriate behaviour. The business began investigating its Italian unit’s accounting practices in October and the sum announced today is far higher than the £145m initially anticipated, and the firm has warned it would affect its results until 2019. The broader UK blue-chip index is higher by around 20 points despite the 17% drop in the share price of BT as well as sizeable declines in easyJet (LON:EZJ) (-7%) and Dixons Carphone (LON:DC) (-5%). The rise is due in part to the Miners with strong moves higher seen in Anglo American (LON:AAL), BHP Billiton (LON:BLT) and Rio Tinto (LON:RIO) seeing the trio occupy the top three spots on the benchmark. Shares in the Banking sector are also recovering after a soft start to the week with Barclays (LON:BARC) and RBS (LON:RBS) both up by more than 1%.