The Latest: UK markets calm after May’s crushing defeat
LONDON (AP) — The Latest on Brexit (all times local):
U.K. financial markets have taken the overwhelming defeat of Prime Minister Theresa May’s Brexit deal in stride.
The pound was up 0.1 percent at $1.2869 in early morning trading, while the FTSE 100 index of leading British shares was down 0.1 percent at 6,888.
Though uncertainty surrounding Britain’s exit from the European Union remains elevated, many in the markets think May’s defeat by lawmakers Tuesday evening makes it less likely the country will crash out of the bloc on March 29 with no deal.
James Smith, an economist at ING, says the “calm market response” suggests investors think at the very least that the government will end up having to seek an extension to the Brexit timetable.
Traders will remain focused on developments in Parliament later, where lawmakers will vote on whether they have confidence in the government.
The head of an influential German business lobby group says the U.K. Parliament’s vote against the Brexit deal with the European Union shows “hysteria has won.”
Joachim Lang, chief executive of the Federation of German Industries, says that lawmakers’ rejection of the deal is “dramatic” and “the chance to find a way out of this chaos has been passed up for now.”
The group, known by its German acronym BDI, warned that Britain is getting closer to a disorderly departure from the EU and “the responsibility for avoiding this lies solely with the government and opposition in London.”
The BDI said trade in goods and services between Germany and Britain amounts to about 175 billion euros ($200 billion) a year.
It said “any uncertainty would endanger tens of thousands of companies and hundreds of thousands of jobs in Germany and especially in the United Kingdom.”
Britain’s envoy to Germany says the European Union might help avert a “no-deal” Brexit if it’s prepared to shift its position on the terms of future border controls with Ireland.
Britain’s ambassador in Berlin, Sebastian Wood, says that the current “backstop ” solution is opposed both by U.K. lawmakers who want the country to leave the EU, and those who don’t.
In an interview with German public broadcaster ARD, Wood noted that Britain wouldn’t have the right to get out of the backstop unilaterally “and many have noticed this.”
He said “this might be the most important question in the coming days and weeks, and the EU can perhaps be a little helpful in that area.”
British Prime Minister Theresa May faces a no-confidence vote a day after Parliament rejected her Brexit deal by an historic margin.
May is battling to save her job after staking her political reputation on a last-ditch effort to win support for the divorce agreement she negotiated with the European Union. Though defeat was widely expected, the scale of the rout — 432-202 — was devastating for May’s leadership.
Immediately after the vote, Labour leader Jeremy Corbyn tabled a no-confidence motion, saying it will give Parliament a chance to give its verdict “on the sheer incompetence of this government.”
Still, most analysts predict May will survive because her Conservative Party and the Democratic Unionist Party, which supports it, are expected to vote against the motion.
European Union Brexit negotiator Michel Barnier says the bloc is stepping up preparations for a chaotic no-deal departure of Britain from the bloc after the rejection of the draft withdrawal deal in London left the EU “fearing more than ever that there is a risk” of a cliff-edge departure.
Barnier regretted Westminster’s massive rejection of the deal he negotiated with the government of British Prime Minister Theresa May and said that any future deal would still have to include approving the withdrawal agreement.
He said Wednesday that “whatever happens, ratification of the withdrawal agreement is necessary. It is a precondition.”
He said that a linked political declaration offered “possible options” for further talks.