Last updated: 11:27 / Tuesday, 27 August 2019
According to AXA IM

Brexit: A Difficult But Attainable End-March Timetable

Brexit: A Difficult But Attainable End-March Timetable
  • Supreme Court upholds High Court decision that government requires Parliamentary approval to trigger Article 50
  • December’s Parliamentary vote to support PM May’s timetable removes some of the risk of this vote
  • There is still a risk of procedural delay, but on balance PM May looks likely to be able to trigger Article 50 by end-March

The UK Supreme Court rejected the government appeal that it could trigger Article 50 without Parliamentary approval. Financial markets posted little reaction with the 2-year and 10-year yields barely moving on the announcement, however, sterling retreated by around 0.5%, which supported a modest pick-up in equities, with the FTSE 100 up 0.25% after the reaction. Responding to the ruling, David Davis, the Brexit secretary, said a bill to trigger article 50 would be published “within days”.

In itself, and according to Axa IM strategist, David Page, the rejection was expected, given the High Court decision. He believes that the sting has been removed from this decision by a Parliamentary vote in December to back  Prime Minister May’s timetable by 461-89 on the condition that the government spelt out its negotiating objectives and Parliament got a final say on the vote. "PM May fulfilled the first part of this in her 12-point Brexit plan last week and committed to a Parliamentary vote at the end of the process."

In his opinion, procedural difficulties may remain. The Supreme Court ruled that an Act of Parliament will be required to trigger Article 50. "There is a risk that procedural challenges and proposed amendments may make the end-March timetable challenging." The Scottish National Party has already suggested an intention to amend the Act. However, the Court did rule that the government does not need to consult regional assemblies. "This removes one of the larger remaining potential hurdles for PM May’s ambitious timetable. As such, there is a good chance that PM May manages to trigger Article 50 according to her timetable of end March, with only some risk of a small procedural delay to this." He concludes.