Article 50 – How Has Brexit Affected GBP
Last night, Prime Minister Theresa May invoked Article 50 of the Lisbon Treaty, officially signalling the UK’s intent to leave the EU. The two year countdown to Brexit has begun.
British ambassador to the EU, Sir Tim Barrow, will deliver the letter by hand to the European Council president, Donal Tusk, later today. According to The BBC’s live Brexit blog, he arrived almost three hours early!
Overnight, Sterling dropping against both AUD and USD, bucking recent positive trends against both (and has already fallen further to 1.6226 AUD and 1.2424 USD as of 11am):
So what happens now? Well, as with post-Brexit vote confusion, it’s hard to tell the exact timeline and what will emerge, and how that might affect GBP performance, but as always, The BBC help explain with a flowchart of the negotiation timelines the UK and EU must now follow. The main issues are:
- Trade: The UK must begin trade negotiations with the EU once it formally withdraws from the current arrangements.
- Expats: With so many Brits living across the EU, it’s vital that their rights, finances, freedom to travel etc are looked after at the earliest possible opportunity.
- Brexit bill: The UK promised to honour its obligations, but has denied claims these could run to £50bn
- Northern Ireland border: As the only land-border between the UK and the EU, May is aiming for “as seamless and frictionless a border as possible between Northern Ireland and Ireland”.
- Sovereignty: Britain will no longer fall under the jurisdiction of the European Court of Justice, so will need to set up their own resolution mechanisms for issues such as trade disputes.
- Security: The UK has strongly signalled its desire to continue cooperating on issues of security and intelligence.
- Transitional deal: An interim arrangement may be needed before the final deal comes into force.