Revoking Article 50 is back in play. Another referendum cannot be ruled out. The TUC and CBI have joined hands: the Labour Party leader may yet be forced to drop his resistance to another referendum.
Emboldened, backbenchers will now try to seize control of the House of Commons, pushing for a series of indicative votes on alternative options, including a second referendum. A previous amendment proposing indicative votes was narrowly rejected last week. The next one may well pass now that the EU has opened the door.
Whatever the outcome, the UK economic data for this week deserves some pause for consideration. Sterling is well bid: this is not, as one article in the FT claimed, “a poke in the eye to the Efficient Market Hypothesis”. On the contrary, the economy remains remarkably strong. The sharp improvement in the public sector finances suggests that support for sterling is merited.
If the UK were to crash out of the EU (less likely now), it is not a given that the economy will spiral into recession. If there is an extension, and the UK did ultimately stay in the EU, then it is possible to imagine a vibrant outlook for the economy. Sterling would rally sharply. The UK has proved to be a major beneficiary of the shift in global economic activity towards services. Furthermore, many of the new jobs are in well-paid occupations.
