With 2 days to go before the EU summit regarding Brexit developments, time is running out for the UK government to come up with a solution to break the deadlock between British MP’s to find a solution for the UK to leave the European block in an orderly fashion.
In an unusual move, Prime Minister Theresa May has engaged in talks with the opposition party’s Jeremy Corban to see if a deal can be forged and although the talks look promising, a deal has still not been reached and the chances of the UK crashing out of the EU have not subsided.
The reason a no deal is still a real possibility is because of the EU’s stance on extending the Brexit deadline which they have vowed not to do if the British government cannot find a way to break the dealock and come up with a deal which means on Friday the UK by default will exit the EU without a deal which is expected to decimate the British pound.
"A longer delay would require the UK to participate in the EU Parliament elections scheduled for May 23-26, but Brussels would need clarity if more time will be needed for a second referendum or new elections for a Brexit rethink. These are hard questions that the UK needs to answer by the EU Summit on April 10. Until then, the legal default remains for the UK to exit the EU without a deal, which in turn, keeps open the risk for the Pound to fall," says Philip Wee, a foreign exchange strategist with DBS Bank in Singapore.
Some say all of this Drama surrounding Brexit has already taken its toll on the British economy and no matter what the outcome, the British economy has suffered major damage which will be felt for years to come.
So even if will do see a positive outcome in Brexit negotiations this week and a deal is reached for the UK to have a smooth and orderly exit from the EU, the damage may already be done and the chances of any major rally for the pound may be difficult.