Theresa May's 'Great Repeal Bill'

Over three months on from Britain’s decision on 23rd June to leave the European Union, the foreign exchange market remains in a state of uncertainty. Britain has been negotiating its terms of a departure with Brussels and steps to activate Article 50, the legal mechanism that facilitates a Brexit. We have now been given more information of the timetable for the official departure and what the settlement will entail.

Highlights since a Brexit was announced:

  • Theresa May announced that Article 50 will be initiated by the end of March 2017
  • Official negotiations will then start with the EU over the Brexit (which must be completed within two years)
  • The government will introduce a Great Repeal bill next year, which means the 1972 European Communities Act giving direct effect to all EU law will be cancelled
  • Once Brexit has been completed, the UK parliament will be able to keep, improve or cancel any legislation

What does this mean for Forex traders?

While clarity is welcomed by most, it appears in the short term that GBP took a hit following May’s tough approach towards the negotiations with the remaining EU members. However, in the bigger picture the data that has come out of the UK ever since the Brexit verdict was announced seems to many traders better than expected, and this gives some confidence in the British economy. With no major UK economic reports scheduled for release, Brexit will continue to be the main story for the markets.

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