As 31st January approached, there was a lot of talk about the light show to replace the Big Ben bongs and commemorate the moment the UK leaves the EU and how the Union Flag will be prominent across Whitehall. Despite the pomp, ceremony and commemorative coins, this doesn’t mark the end of the story. There is still a lot of work to do relating to Brexit during the rest of the transition year and there may once again be an impact on sterling.
How did we get here?
There have been several false starts, detours and delays since the results came in with the vote to leave the EU on 23 June 2016. Here are some of the key dates in the Brexit process.
• 13 July 2016: Theresa May becomes Prime Minister after the resignation of David Cameron.
• 29 March 2017: The PM triggered Article 50, starting the clock on the two-year countdown to departure.
• 8 June 2017: A snap election sees the Conservative Party retain power with a diminished majority and a need to form an agreement with the DUP.
• 25 November 2018: The draft Withdrawal Agreement is published, including the controversial plans for an Irish backstop.
• 15 January 2019: The agreement suffers an historic parliamentary defeat, losing 432 votes to 202.
• 12 March 2019: Minor amendments to the agreement were not enough to pass the agreement at a second vote, and it lost by a margin of 149.
• 27 March 2019: Parliament proposes moving the Brexit deadline from 29 March to 12 April or 22 May 2019.
• 12 April 2019: The Brexit date was pushed back to 31 October 2019.
• 24 May 2019: Theresa May announced her resignation as Prime Minister and her departure date as 7 June 2019.
• 24 July 2019: Newly appointed Prime Minister Boris Johnson takes residence at Number 10.
• 28 August 2019: Reports emerged that the PM had requested that parliament be prorogued for five weeks in the run-up to the 31 October deadline.
• 4 September 2019: Parliament votes to back a bill blocking a no-deal Brexit before being prorogued.
• 24 September 2019: The Supreme Court rules that parliament was suspended unlawfully and MPs return to the House the next day.
• 19 October 2019: Parliament sits for an extraordinary Saturday session and once again reject the Brexit deal. Bound by the Benn Act, Boris Johnson requests a further three-month extension to the Brexit deadline.
• 28 October 2019: Boris Johnson calls for a snap election, which is approved by both Houses by 30 October.
• 12 December 2019: A general election delivers a significant majority for the Conservative Party, increasing the likelihood of passing the Brexit deal through parliament.
• 20 December 2019: MPs vote 358 to 234 to approve the EU withdrawal bill.
Is it all over now?
Although passing the bill in parliament and meeting the departure deadline are significant hurdles that have been overcome, this isn’t the end of the Brexit story. Throughout the process, sterling has been under pressure due to the ongoing uncertainty. Going forward, there is at least a more definite plan for the transition period, but the deadline at the end of the year continues to loom large. Businesses will be hoping that the transition period will bring a lot more clarity but there’s a lot to work out and it’s possible that the difficult passage of one or two big issues throughout the ongoing negotiations could unsettle sterling.
Brexit dates to watch in 2020
• 1 March 2020: After a meeting of the EU27 on 25 February, the EU hope to have the negotiating mandate agreed. Both sides agree that the priority is the negotiation of a free trade agreement.
• June 2020: As proposed in the UK’s Brexit deal, a summit will take place in June to assess progress and deliver an EU-UK political declaration. This is also the final month when the PM can request an extension of the transition period.
• 26 November 2020: The final deadline for the deal, which must have been negotiated, checked, translated and presented to the European Parliament for the penultimate plenary session.
• 31 December 2020: The UK leaves the EU – this is the new cliff edge. If a deal hasn’t been negotiated, the UK will resort to basic WTO trading terms with no co-operation on border controls.
It’s clear that Brexit isn’t going to fade from the headlines overnight on 31 January, and there are many unresolved issues which may cause fluctuations in the value of the pound. Positive progress could be good news for businesses and for sterling, but further delays or frustrations could pile on the pressure. There’s also one more date to keep in mind – 31 December 2022. That’s the final extension date for the transition period, but sterling won’t be alone in hoping that the Brexit drama won’t drag on for a further two years.