The pound has surged against the dollar and euro, after Theresa May conceded for the first time that the UK’s departure from the European Union could face a lengthy delay.
Sterling briefly hit $1.3380 against the dollar, the highest level since June 2018, and €1.18 against the euro – a 22-month high – after May’s Commons statement, which followed two votes in which MPs defeated her government and rejected leaving the EU without an agreement with Brussels.
Sterling had steadily risen on foreign currency exchanges throughout the day amid speculation that a no-deal Brexit was becoming less likely, before rising more sharply in the evening.
However, business leaders warned urgent legal steps were still required to remove the risk of no-deal Brexit, even after the latest Commons votes.
Although broadly welcoming parliament’s rejection of no-deal Brexit, business groups said that risks to the UK economy still remained. Business leaders have repeatedly warned that crashing out without a deal would cause severe damage to the economy and put jobs at risk. Miles Celic, the chief executive of the financial lobby group TheCityUK, said: “Without an agreement between the UK and the EU, this vote sadly delivers very little.”
Catherine McGuinness, the policy chair of the City of London Corporation, said: “Parliament’s decision to reject a hugely damaging no-deal Brexit is a victory for common sense. MPs have rightly voted in the interests of businesses and households by taking a step away from the brink.”
Edwin Morgan, the interim director general of the Institute of Directors, said: “Parliament has clearly spoken, but for this to be more than just words, MPs now need to agree on what they want in place of no-deal.”
Helen Dickinson, the chief executive of the British Retail Consortium, said: “We welcome MPs’ commitment to taking no-deal off the table. However, it remains the default option if nothing else can be agreed. Until a solution is found that can command the support of the House of Commons, it is impossible to guarantee that a disastrous no-deal is avoided.”
