The British pounds strengthens against the U.S. dollar and the euro after a string of parliamentary defeats for UK Prime Minister Theresa May increases the chances that Brexit will eventually be called off.
The odds are still below 50%, though. JPMorgan raised the probability of Britain ultimately staying in the EU to 40% from 20%.
Recently published legal advice by UK Attorney-General Geoffrey Cox warns that May’s Brexit plan to avoid a hard Irish border will “endure indefinitely” until the UK and EU put in place a new long-term trading pact.
Even though the backstop isn’t intended to be permanent, Cox says that without a right of termination, “there is a legal risk that the United Kingdom might become subject to protracted and repeating rounds of negotiations,” and that the backstop would remain even if negotiations break down.
The pound rises 0.5% against the dollar and +0.3% against the euro.