Published On: Thu, Sep 5th, 2019

Pound to euro exchange rate: GBP gains as MPs back bill to block no-deal Brexit | Personal Finance | Finance

The pound gained against the euro by more than 0.5 per cent yesterday. At the time of writing, the pound was trading at 1.1084€, according to Bloomberg. The pound closed at 1.103 last night. It came as MPs backed a bill which is intended to block a no-deal Brexit on October 31.

Opposition MPs and Tory rebels ensured that the bill passed by 327 votes to 299.

Prime Minister Boris Johnson had said he would use the Fixed Term Parliaments Act total for an early general election on October 15, if the bill got through the second vote on Wednesday night.

The date of the election is both before the EU summit, as well as the current due date for the UK leaving the EU on October 31.

Michael Brown, Senior Market Analyst at Caxton, told “Sterling gained more than 0.5 per cent against the euro on Wednesday, as the pound’s attraction modestly increased as the perceived risk of a no-deal Brexit fell; with lawmakers succeeding in passing legislation aimed at preventing such an outcome.”

But, despite the pound making gains, Mr Brown warned that further uncertainty could have an impact on the pound.

“However, the pound is not yet out of the woods,” he said.

“It now appears to be a question of when, rather than if, a general election will be called.

“Hence, uncertainties stemming from this potential poll should keep a lid on any rallies for now.”

Earlier this week, Number 10 made the decision to remove the party whip from the 21 Conservative MPs who voted against their own government.

Following the events, the pound made a recovery against the euro.

Mr Brown said: “Sterling was whipsawed by political uncertainty on Tuesday, recovering from one week lows against the common currency after Parliament took the first step towards ruling out a no-deal Brexit.

“Lawmakers voted in favour of taking control of today’s Order Paper, which will see legislation introduced to legislate for an Article 50 extension should no deal be agreed.

“The pound is not yet out of the woods, with PM Johnson planning to call a general election if lawmakers pass a bill requiring a Brexit delay.

“Sterling traders will remain glued to political developments today, with downside risks persisting.”

Elsewhere in the House of Commons yesterday, the Chancellor of the Exchequer Sajid Javid delivered his Spending Round speech.

The Chancellor announced a further £2 billion for Brexit delivery next year.

It comes after providing £2.1 billion of extra funding for Brexit and No Deal preparedness.

He also confirmed a £6.2 billion increase in NHS funding next year, as well as councils being set to have access to £1.5 billion of new funding for social care in 2020.

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