Sterling slipped on Tuesday after the British parliament’s moved to wrest control of the Brexit process for a day, raising expectations that lawmakers can end an impasse on Britain’s European Union exit, but also the chances of a snap election.
Parliament will now vote on Wednesday on a range of Brexit options, giving parliament a chance to indicate whether it can agree on a deal with closer ties to Brussels – and then try to push the government in that direction.
However, Prime Minister Theresa May has stressed she will not implement any proposal counter to her pledge to a clean break with the EU. That means she could call an election, a prospect backed also by the opposition Labour.
If Britain cannot outline a plan by April 12, it must leave the European Union by May 22 with or without a deal, according to the terms of an extension granted recently by the bloc.
The pound traded at 1.3180, down 0.14 percent on the day, having risen to 1.3224 after Monday’s parliament vote. Against the euro it was flat at 1.1655.
The risk of a general election and a no-deal Brexit remain potential banana skins for the pound in the near-term