Posted by Rewan Tremethick on November 3rd, 2016.
The UK’s High Court has just ruled that the Government cannot use Royal Prerogative to trigger Article 50 of the Lisbon Treaty without support from a Parliamentary vote. The government had argued that it had a constitutional right to invoke the exit clause and begin the procedures to withdraw from the European Union. However, the challenge, brought by London businesswoman Gina Miller, has been upheld.
According to the Press Association;
‘In one of the most important constitutional cases in generations, three senior judges ruled the prime minister does not have power to use the prerogative to trigger Article 50 of the Lisbon Treaty to start the UK’s exit from the European Union – without the prior authority of Parliament.
The ruling against the government was made by Lord Chief Justice Lord Thomas, sitting with two other senior judges in London.’
The ruling has already caused a significant rise in Pound exchange rates, with Sterling bullish against the majority of its peers. Markets have reacted positively to the news; Brexit concerns create instability and there are significant fears regarding the damage breaking from the EU could do to the domestic economy, making the UK a less attractive and profitable place in which to invest.
Gains are somewhat restrained by the fact that the government’s lawyers have already requested the right to appeal. The case could still be taken to the Supreme Court, giving the government a chance to have the ruling overturned. However, from the point of view of investors, this is a positive step towards giving Parliament power over Brexit.
The Pound is likely to continue to be supported by hopes that MPs, the majority of whom supported remaining in the EU, will at least curb the government’s hard-line Brexit plans, or even vote to block the triggering of Article 50 completely.
Many MPs have said the latter is unlikely, but investor optimism will likely see the Pound rise higher, until jitters over the next round of court proceedings begin.
GBP EUR and GBP USD exchange rates are currently advancing by 0.8%, while GBP AUD and GBP NZD are up over 0.6%.
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