UK Parliament Hits May on Brexit No-Deal
United Kingdom Parliament Rejected Brexit on Tuesday (03/12) - Photo by UK Office

JAKARTA (TheInsiderStories) – Unite Kingdom (UK) Prime Minister Theresa May again suffered a severe defeat in the British exit (Brexit) strategy after the British Parliament chose to no-deal in a second agreement, on Thursday (01/14).

The vote was not binding on the government, but the motion was a May effort to give more time to get concessions from the European Union (EU). The ministers fear that defeat will ruin the negotiations.

In the vote, the House of Commons voted with 303 to 258 opposing a motion supporting May’s approach to resolving the Brexit standoff, after a Euroskeptic rebellion at its Conservative Party.

More than that, the defeat effectively erased May’s political mandate to demand changes to the European Union’s withdrawal agreement in Brussels.

UK Parliament still considers that May is unlikely to continue to negotiate and expect full agreement with parliament.

Meanwhile, Pro-Brexit European Research Group Conservative politicians refused to vote for the May motion and abstained in protest.

This caused by the Commons is deeply divided between politicians who want to leave the European Union in a clean split – even if it means divorce without agreement – and others who prefer to stay close to the block, and even hope to stop Brexit.

As reported, Britain will leave the EU on March 29, but Parliament rejected the terms negotiated by May in a vote last month.

It means the US will fall from a block of 28 countries without an agreement, which has the potential to cause major damage to the economy, unless one of the parties withdraws.

In recent months, May has continued to try to persuade the EU to make legally binding changes to the most controversial part of the EU withdrawal agreement, which is called a backstop guarantee for the Irish border.

Even so, before the Thursday vote, May communicated with German Chancellor Angela Merkel to discuss the latest developments towards consensus out on March 29.

In addition, May also spoke with leaders of Austria, Portugal and Sweden and all agreed they wanted Britain to leave the EU with an agreement.

With Brexit no-deal case, Bank of England (BOE) economist Jan Vlieghe estimates that Brexit tugging has cost the British economy £40 billion per year – or £800 million per week – in the period since the EU referendum in 2016.

He estimates that since the vote, Britain has lost 2 percent of GDP relative to a scenario where there are no significant domestic economic events – equating a total of around £80 billion over the past two years.

According to him, the loss was not due to changes in the trade relations between the UK and the EU, but rather related to hopes of future changes, and uncertainty about future changes.

The company has told the Central Bank that Brexit fears have hit investment, with many scaling up expansion plans.

Vlieghe added, Brexit uncertainty weighed on the exchange rate, household purchasing power, economics slowdown and hit British investment.

He recommends that interest rates are more likely to fall if the UK falls out of the EU without agreement.

Therefore, BOE continues to looking for in real time how well inflation expectations remain anchored, and how households and businesses react to disruptions.

Previously, the BOE had cut its growth forecast for the following year, and notes the possibility of a recession in 2019 was due to holding the base interest rate at 0.75 percent.

Governor BOE Mark Carney warned that Brexit risk that has no agreement will have an impact on low probability.

Written by Daniel Deha, Email: daniel@theinsiderstories.com

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