The pound has been volatile in recent weeks as tension has mounted over the matter of Brexit.
The Lords passed an amendment to a trade bill, requiring the government to join a customs union after Britain leaves the EU ahead of the votes in the Commons.
Although not binding without approval from parliament, the bill was a precursor to the main event. The pound rose to fresh highs on hopes that there would be an end to the Brexit uncertainty as the updated deal was put to MPs but the bill was voted down and lost by 149 votes.
Phillip Hammond releases Spring Statement
The next day brought the Chancellor’s Spring Statement and a vote on whether to rule out leaving the EU without a deal. The spring statement included a review of government borrowing - £3bn less than expected - and a downgraded forecast that gross domestic product will expand by 1.2% this year as well as a warning about the potential impact of leaving the EU without a deal.
The market largely ignored the Chancellor’s statement but responded after MPs rejected the ‘no deal’ scenario with a majority of 43.
The pound initially rose after the news, but fell back the next morning as the market acknowledged that much relied on the possibility of extending the departure date beyond 29th March.
MPs request a delay in the UK’s departure from the EU
The following day, MPs voted by 413 to 202 to request a delay in the process from the EU. The pound had been falling ahead of the vote but stabilised and made gains on the possibility of the extension.
There may still be come volatility to come – the request must be approved by all 27 EU member states, and there is still a lack of clarity about the nature of the extension.
PM Theresa May suggested that Brexit could be delayed by three months, to the 30th June if MPs backed her deal, but may require a longer period if parliament continued to reject that proposal.
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