NEWS

Pound To Euro Exchange Rate Soars As Government Loses Article 50 High Court Ruling

03/11/2016 10:52 | Updated 05 November 2016

The embattled pound surged against the Euro as the High Court ruled Theresa May must consult Parliament before triggering Article 50.

Overnight and into the morning Sterling had held at around 1.1091 but shot up to 1.1218 after the announcement was made.

Bloomberg
And rising...

The High Court ruled Theresa May does not have the authority to use royal prerogative to trigger Article 50 and take the United Kingdom out of the European Union.

Instead MPs will be granted a vote in the Commons.

The government has been given the go-ahead to appeal against the ruling at the Supreme Court.

David Cheetham, market analyst at XTB.com, said: “Today’s revelation that the UK must hold a vote in parliament before starting the two-year negotiation window on the terms of a Brexit has sent shockwaves through the markets and seen the pound rally, with the currency moving up to its highest level in almost a month against the US dollar.

“The decision [has] seen some strong selling in stocks with the FTSE 100 falling to its lowest level since the end of September - when PM Theresa May announced that Article 50 would be triggered by March 2017 at the latest.”

The surge in the pound is the exact opposite market reaction to last week when the High Court in Belfast ruled in favour of the Government in a similar case.

The landmark legal challenges were brought by a group of cross-party MLAs and a Troubles victims’ campaigner, Raymond McCord, who were worried Brexit could reduce EU funding for peace projects in Northern Ireland. 

Justice Maguire rejected the argument that the Good Friday Agreement had given sovereignty of Northern Ireland over to its people who would suffer a “catastrophic effect” by leaving the EU.

With a barrier to the triggering of Article 50 removed, Sterling plunged.

Bloomberg
The fall in the pound after last week's High Court ruling.

Although good news for manufacturers, the overall downward trend of the pound since the EU referendum vote is bad for importers and those looking to holiday abroad.

HSBC has predicted the pound will hit parity against the Euro by the end of the year meaning a 1:1 exchange rate, bad news for holidaymakers but a boost for exports 

Bloomberg
The fall in the pound since the beginning of the year.

Liberal Democrat leader Tim Farron welcomed today’s ruling. “Given the strict two year timetable of exiting the EU once Article 50 is triggered, it is critical that the government now lay out their negotiating to Parliament, before such a vote is held,” he said.

“So far May’s team have been all over the place when it comes to prioritising what is best for Britain, and it’s time they pull their socks up and start taking this seriously.

“Ultimately, the British people voted for a departure but not for a destination, which is why what really matters is allowing them to vote again on the final deal, giving them the chance to say no to an irresponsible hard Brexit that risks our economy and our jobs.”

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