Politics

Sterling gains after Brexit minister resigns

Brexit Secretary David Davis said on Monday he had resigned to stop Prime Minister Theresa May from handing too much power to the European Union, increasing the pressure on a British leader struggling to overcome Brexit divisions. But, as Ivor Bennett reports, sterling hit its highest level since June 14 and Britain’s FTSE gained.

(REUTERS, UK POOL, EBS, MOD) – The photos of Theresa May’s Brexit summit last week were supposed to show a united front.

But even though she got cabinet’s approval, it was clear the man who was supposed to lead negotiations with the EU was never on board.

And now has turned his back on the Prime Minister for good.

DAVID DAVIS, FORMER BREXIT MINISTER,

“I’m worried that what the European Union will do is simply take what we’ve offered and either ask for more or wait for more. And I think there’s got to be a time when we get a bit tougher with them and this should’ve been the time.”

David Davis believes the Prime Minister has given away too much

By coming up with a plan for a free trade area for goods.

The pound rose on his resignation, suggesting traders believe it makes this so-called ‘soft Brexit’ more likely.

SOUNDBITE (English) PETER DIXON, GLOBAL FINANCIAL ECONOMIST, COMMERZBANK, SAYING:

“David Davis was a known proponent of Brexit. If he’s no longer there then in a sense the people shaping the Brexit policy will presumably be more amenable to a soft Brexit, which I think will be the outcome which causes the least damage to the UK economy in the longer term.”

Theresa May enjoyed a warm reception from Angela Merkel last week

but there’s still no guarantee that she and the rest of Europe is on board with Britain’s plan.

PETER DIXON, GLOBAL FINANCIAL ECONOMIST, COMMERZBANK,

“It wants access to goods but it said nothing about free movement of labor which is something that the EU is very keen to preserve. The Irish border question remains a sticking point. So it’s by no means clear to me that the EU will necessarily agree to what the UK is proposing.”

Dominic Raab is now the one tasked with persuading them.

But even if he does, any deal will then need to get through parliament, which could prove the tougher sell.


Associated Links

  • Commerzbank
  • House of Commons of the United Kingdom
  • Government of the United Kingdom
  • Brexit
  • European Union
  • Euroscepticism in the United Kingdom
  • Withdrawal from the European Union
  • Theresa May
  • David Davis
  • Secretary of State for Exiting the European Union
  • Aftermath of the United Kingdom European Union membership referendum