Pound Collapses as Brexit Deal Crumbles in Flames

Posted in: Markets
October 17, 2019 6:32 AM UTC

Any hopes of securing a last-minute Brexit deal today went up in flames as the Northern Irish Democratic Union Party (DUP) said they couldn’t support Boris Johnson’s latest proposals “as it stands”. The British pound immediately fell 0.6% against the dollar.

In a statement issued on Twitter, the DUP outlined:

“We have been involved in ongoing discussions with the Government. As things stand, we could not support what is being suggested on customs and consent issues and there is a lack of clarity on VAT. We will continue to try and get a sensible deal that works for Northern Ireland and protects the economic and constitutional integrity of the United Kingdom.”

The revelation means there will almost certainly be no legal text for EU leaders to agree today.

Boris Johnson’s desperate attempt to save Brexit deal

Boris Johnson returned to the EU in recent months to negotiate a fresh deal after former Prime Minster Theresa May failed to find a solution.

Johnson’s new deal, which involved a customs border in the Irish sea, did enough to sway the eurosceptics in his own party, giving the UK hope for an amicable deal before the October 31st deadline.

But without a clear majority in parliament, Johnson needed the backing of 10 obscure Northern Irish MPs in the Democratic Union Party. Today’s statement implies he won’t get it.

The British pound collapsed against the US dollar in early trading Thursday as the DUP blocked hopes of a Brexit deal. Source: TradingView

The DUP holds the future of Europe in its hands

Following a weak election in 2017, the ruling Conservative party was forced to turn to the DUP to form a majority in parliament. As a result of the deal, the DUP now acts as king-maker in all manner of British decisions.

The party holds the future of Britain and Europe in its hands.

Traders reacted immediately, sending the British pound tumbling 0.6% against the dollar in a matter of minutes. The likelihood of the UK crashing out the EU without a deal has now increased dramatically unless Boris Johnson can find a solution today that appeals to the EU and the DUP.

Samburaj Das edited this article for CCN.com. If you see a breach of our Code of Ethics or Rights and Duties of the Editor or find a factual, spelling, or grammar error, please contact us.

Last modified: January 10, 2020 2:56 PM UTC

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Ben Brown @_ben_brown

Ben is a journalist with a decade of experience covering financial markets. Based in London, UK, his writing has appeared in The Huffington Post and he was Chief Editor at Block Explorer, the world's longest-running source of Blockchain data. Reach him at benjamin-brown.uk or on Twitter at _Ben_Brown. Email ben @ benjamin-brown.uk.