UK: Further political uncertainty – Rabobank

Rabobank analysts point out that at 10:30 BST this morning the UK’s Supreme Court is expected to rule on whether or not PM Johnson unlawfully provided advice to the Queen in order to prorogue parliament.

Key Quotes

“The PM has been accused of wanting to suspend MPs in order to stop them interfering in his Brexit plans. The credibility of the PM, who has been accused by the weekend press of failing to declare a potential conflict of interest over the use of public funds while London Mayor, would be dealt a body blow if the ruling goes against him. Despite this, Johnson has indicated that he would not feel obliged to resign. He has also refused to rule out proroguing parliament again.”

“Further political uncertainty could bring fresh downside pressure for the pound. That said, GBP will continue to derive direction from Brexit news. The PM is scheduled to have meetings with German and French Presidents Merkel and Macron this week on the sidelines of the UN summit. His meeting with EU Council President Tusk yesterday failed to bring a breakthrough.”