The pound is falling sharply on Tuesday morning after parliament on Monday night passed the so-called Brexit bill without any amendments, paving the way for Prime Minister Theresa May to trigger Article 50 at some point this month.
MPs overturned two amendments to the Brexit bill that would have protected the rights of EU citizens living in the UK and ensured that parliament had a “meaningful vote” on the terms of Brexit at the end of the Article 50 negotiating process.
News of the bill’s passing accelerates the process of Brexit — and while it is highly unlikely that May will trigger Article 50 on Tuesday, as some had previously expected — the notification to the EU will now be delivered by the end of March at the latest.
“We’ve been clear we will trigger Article 50 by the end of March,” a Downing Street spokesperson said on Monday. “I’ve said ‘end’ many times but I didn’t put it in capital letters strongly [enough].”
All this has pushed the pound sharply lower in morning trade on Tuesday, and as of 9.15 a.m. GMT (4.15 a.m. ET) it is down close to 0.6% against the US dollar to trade at $1.2142. A little earlier it dropped as low as $1.2116, a level not seen since mid-January.
Tuesday’s fall “suggests that the reality of the UK’s divorce from Europe and two years of horse-trading to agree trade deals is beginning to spook the FX market,” Kathleen Brooks of City Index writes in her Tuesday morning email.