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Decision day: May’s deal faces likely defeat

Theresa May's Brexit deal is doomed to be rejected. The question everyone is asking is how badly it will fail.

Brexit delay attracts mixed reaction back at home

Theresa May is facing what could be the biggest loss in Commons history today.

As Members of Parliament gather tonight to vote on her Brexit withdrawal agreement, the UK Prime Minister needs 318 MPs to be in favour to pass her deal. However, the numbers are at odds, with commentators predicting a loss by over 200. With such gloomy predictions (in addition to a threat to May’s premiership and uncertainty over what Brexit will look like), Sterling is in a fragile position and could face declines similar to those seen after the June 2016 referendum.

European Commission President Jean-Claude Juncker tried to step in yesterday, 14 January. In a published letter to May, he emphasised that the Irish backstop was the last resort and “sub-optimal” for trade. He offered no time limits but stated it would not be indefinite. Juncker’s reassurances were not enough to sway MPs to back the PM’s deal.

Meanwhile, the Dollar weakened against a basket of currencies yesterday, after Federal Reserve member Richard Clarida warned that the central bank could be “very patient” when it comes to raising interest rates and will “take this meeting by meeting”. The comments added to the worries over the US economy, which has recently been losing steam, after the figures released yesterday showed Chinese exports contracted.

Today, all eyes will be on Westminster and any developments ahead of tonight’s vote. If defeated, May will have three days to come back to Parliament with an alternative Brexit plan.

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