EU and UK flags

05 Sep 2019

Tories in disarray as Johnson suffers two crushing defeats

It was a night to forget for PM Boris Johnson, losing votes on both the Hilary Benn Bill to request an extension to Article 50 and his own motion for a general election. 

On the Benn bill it passed the House of Commons with a final vote of 327 to 299, meaning that it will now pass to the House of Lords today. There had been some talk that the government may try and hamper the bill’s progress through the Lords by tabling 100 or so amendments in an attempt to filibuster it.  However news overnight seems to suggest that the Conservative and Labour chief whips in the Lords reached an early morning agreement to allow the bill to pass the Lords by 5pm of Friday with the final aim of moving it forward for Royal Assent on Monday. Notably 21 Tory rebels were effectively expelled from the Tory party yesterday for voting against the government, however a further headache for Boris is the apparent growing discord amongst some of the remaining Tories over the expulsions, they include the 100-strong ‘one nation’ group within the Tory party and even Michael Gove, who reportedly urged the Prime Minister to reconsider his decision and readmit the rebels to the party.


Defeat 2

The second embarrassing defeat for the PM came in the opposition to his motion for an early general election on the 15 October. Under the Fixed Term Parliaments Act an early election can be triggered if there is a 2/3 (434 votes) majority in the House of Commons for one, last night’s vote saw just 298 in favour, with 56 against. Notably the vast majority of the Labour Party abstained from the vote, with Labour Leader Jeremy Corbyn seeing the offer of a general election as a ploy to circumvent the extension bill and holding the position that they would not support a general election until the Benn bill had gained Royal Assent. Sterling has made some solid gains over the past 24 hours, with the benchmark EUR/GBP rate now
standing at £0.9020 as markets judge that the prospect of a no-deal Brexit in 56 days’ time has all but disappeared. It’s also worth noting that Boris Johnson will travel to Yorkshire later today to give a speech (expected around 4:00pm). This was originally intended to be championing his plan to hire an extra 20k police officers but will now additionally be a rallying cry for a general election.


Economic Releases

US 13.15 ADP employment change

US 15.00 ISM non-manufacturing index