Markets sent mixed signals this morning as MPs prepared to vote on the proposed Brexit deal put forward by Prime Minister Theresa May.
The pound was stronger against the and the , but lower against the .
The blue-chip was higher, but – perhaps ominously – the FTSE 250 was down. This is the index more closely aligned than is the FTSE 100 with domestic British businesses, thus traders and investors may be taking the view that such firms stand to lose most from a no-deal Brexit.
Backstop is stumbling block
With a defeat for the government on the cards, attention has shifted to the likely scale of MPs’ rejection of the deal. Were more than 100 of her MPs to vote against, it is though possible Mrs May would feel obliged to stand down.
This would trigger a leadership contest within the ruling Conservative Party as the clock ticks down to 29 March, when Britain is due to leave the European Union.
Meanwhile, there are suggestions that Parliament itself could seize control of the Brexit negotiations, or, alternatively, that a snap general election could be called.
This is to ensure the internal Irish border remains open.
Objections include the fact that there is no time limit to the backstop, that the UK cannot leave it without EU agreement and that it leaves Northern Ireland off from the rest of the country.
This morning, the FTSE 100 index was 0.33% higher at 6,877.31, while the FTSE 250 was down 0.15% at 18,390.71.
Continental shares shrug off weak German growth
Sterling was 0.28% higher against the euro at €1.1253 but 0.07% down against the dollar at $1.2858. It was 0.31% stronger against the yen at 139.6550 yen.
The recent past has showed mounting uncertainty concerning the politics of Brexit has hit both shares and sterling. Three months ago, on 15 October, the FTSE stood at 7,029.2202 while the FTSE 250 traded at 18,803.4492.
Against the euro, the pound stood at €1.1359 and it traded against the dollar at $1.3153. Its value against the yen was 146.975 yen.
The country’s export machine was affected by a slowdown in the world economy. The economy grew by 2.2% in 2017.