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Brexit: May to ask EU for more time

While Britain is officially still due to leave the EU on 29 March, Theresa May has been prevented from calling a third vote and has been forced to request a delay to Brexit.

Brexit: May to ask EU for more time

Theresa May will seek to extend Brexit beyond 29 March, but only for a “short” period of time. In an official letter to European Council president Donald Tusk, the UK prime minister will request a three-month delay in a hope the extra time will allow her to win over the UK Parliament to pass her Brexit withdrawal agreement.

EU chief Brexit negotiator Michel Barnier warned yesterday that an extension will not be granted unless it has a “purpose”, suggesting that May could have a tough time convincing European leaders that she can get her deal through Parliament at a summit in Brussels tomorrow, 21 March.

Meanwhile, market participants are awaiting two key releases –UK inflation data and the Federal Reserve’s (Fed) interest rate decision.

The UK’s Consumer Price Index (CPI) due for release at 09:30 (GMT) is expected to show inflation is holding steady at 1.8 per cent, despite wages growing at their fastest rate for three years. Yesterday, the UK unemployment data revealed the labour market was booming despite uncertainty over Brexit and the unemployment rate fell to 3.9 per cent – its lowest in 44 years. Wages grew at 3.4 per cent. The question is when this increase will filter down into further inflationary pressure.

Across the Atlantic, there is no expectation that the Fed will change interest rates. However, the focus will be on the subsequent press conference and any guidance from Fed chair Jerome Powell on the central bank’s future plans to unwind its $4 trillion’s worth of bonds purchased during quantitative easing.

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