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Brexit legal challenge: Pound rises as High Court rules against Theresa May triggering Article 50 without Parliament Brexit legal challenge: Pound rises as High Court rules against Theresa May triggering Article 50 without Parliament
(about 5 hours later)
The pound has risen the most since August against the dollar after the Government announced it cannot trigger Article 50 without parliament approval. The pound has risen against all of its major peers on Thursday after the Government announced it cannot trigger Article 50 without parliament approval and the Bank of England said it is no longer expecting to cut interest rates this year.
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On Tuesday morning, campaigners have won their High Court battle against Theresa May to prevent her using executive powers under the royal prerogative to start the process of leaving the EU.On Tuesday morning, campaigners have won their High Court battle against Theresa May to prevent her using executive powers under the royal prerogative to start the process of leaving the EU.
Sterling rose by 1 per cent against the dollar trading above $1.24 in the immediate aftermath of the ruling.Sterling rose by 1 per cent against the dollar trading above $1.24 in the immediate aftermath of the ruling.
That's the first time its broken above $1.24 in three weeks.  It jumped higher again at midday after the Bank of England’s monetary policy committee announced a unanimous vote to hold interest rates and its bond buying programme unchanged.
The pound also hit a one-week high of 89.135p per euro after the decision was announced. The decision took the pound to a high of $1.248, up 1.44 per cent on the day - its biggest advance since July.
It quickly lost its earlier gainst trading at $1.23 against the dollar by 10.20 am. The FTSE 250 – which is more domestically focused – also benefited from the High Court ruling on Thursday morning rising by more than 1 per cent.
“The fact that the Government has lost this legal challenge indicates that they will need to seek Parliamentary approval and not simply be able to railroad through Article 50 implementation,” said Ned Rumpeltin, the European head of foreign-currency strategy at Toronto Dominion Bank told Bloomberg. Meanwhile, the UK’s benchmark FTSE 100 fell 0.41 per cent, the only major European market in negative territory. The UK’s major listed companies earn most of their revenue outside the UK, so a rise in the pound can be negative for the index. The FTSE 100 was down 0.80 per cent at 6,790 points by market closing time.
“Naturally, that keeps the debate alive - and with it hopes that the UK will be able to pull back from the brink.” “It does shift the odds somewhat that the process is going to be delayed and given that Brexit is the issue that has weighed on the pound, it means there’s a bit of a relief rally on that,” said John Hardy, head of foreign-exchange strategy at Saxo Bank.
Howevever, the Government has already been given the go-ahead to appeal the court ruling that MPs must vote before Britain can leave the EU. Howevever, the Government has already been given the go-ahead to appeal the court ruling that MPs must vote before Britain can leave the EU and analysts are expecting more volatility.
The ruling comes only two hours before the Bank of England announces its latest monetary decision, Bank of England governor Mark Carney said the high court ruling on Brexit was “one of the examples” of the uncertainty that are overshadowing the UK economy.
The Bank of England is expected to reveal new economic forecasts showing the biggest overshoot of its official 2 per cent inflation target in the independent central bank’s modern history. He added that Britain's relationship with the EU will be the biggest driver of its prosperity in the medium term, and that the fall in sterling appeared to reflect market expectations of a less open trading relationship with the EU.