Supreme Court Rules against UK Government
The highly anticipated Supreme Court (SC) decision for the Article 50 case has been announced, with the court ruling against the UK government; requiring a Parliamentary vote before the process to begin.
Article 50 of the Treaty of the European Union (EU), is a part of EU law that lays out the process of how a member state may withdraw from the EU. The appeal heard before 11 Supreme Court (SC) justices in December, announced the majority (8 – 3) verdict on the 24th January at 9:30am.
On the devolution issues, the SC noted that “Relations with the EU and other foreign affairs matters are reserved to UK Government and parliament, not to the devolved institutions”. It adds that “The devolved legislatures do not have a veto on the UK’s decision to withdraw from the EU”.
In early European trade ahead of the vote GBPUSD had edged to around the 1.2500 mark. The initial headline announcement that the government had lost the appeal case, led Sterling to appreciate to a high of 1.2534*. However this move was short-lived, with the detail that the court had unanimously decided that devolved Parliaments in Scotland and Wales did not need to be consulted before Article 50 is triggered.
As the UK government only requires a bill, with current information, Citi Analysts still believe their base case to be on track for Article 50 to be triggered by the end of Q1.
Source: Reuters 24th January 2017
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