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EU agrees to three-month Brexit deadline extension

By Michele Maatouk

Date: Monday 28 Oct 2019

EU agrees to three-month Brexit deadline extension

(Sharecast News) - The EU has agreed to extend the Brexit deadline to 31 January 2020.
Donald Tusk, president of the European Council, tweeted: "The EU27 has agreed that it will accept the UK's request for a #Brexit flextension until 31 January 2020. The decision is expected to be formalised through a written procedure."

Sterling was up 0.1% against the dollar at 1.2837 and 0.1% lower versus the euro at 1.1573.

The news comes ahead of a Commons vote on whether to hold an election on 12 December. A two-thirds majority is required for Prime Minister Boris Johnson's motion to pass.

David Cheetham, chief market analyst at XTB, said: "Speculation that the bloc would only entertain a shorter extension at the request of France had caused some doubts but it appears that once more the EU are trying hard to be seen to not force the issue.

"An election before year-end seems the most likely outcome, although there appears to be a greater chance of this occurring December 9th, rather than the government's preferred date of December 12th. MPs will vote later on the PM's proposal but with Labour set to abstain and a two-thirds majority needed it is unlikely to pass. The Lib Dems and SNP are said to favour a slightly earlier date, and have proposed a bill that would only require a simple majority of over 50% to pass.

"Looking at the dates it seems to be splitting hairs with the decision to try and bring it forward to Monday 9th December from Thursday 12th hardly likely to see any tangible impact from the student vote who would be heading home for Christmas given that it is the same week."

Joshua Mahony, senior market analyst at IG, said: "The decision to provide an extension must be seen as a positive thing, given how close we are to a disorderly Brexit. However, while a no-deal has been averted for now, this extension points to more uncertainty and economic decline as businesses remain in the dark over where the country is heading.

"The pathway to resolving this deadlock remains far from certain, with today's election vote likely to be rejected despite claims from all sides that they would relish a showdown at the polls. For the conservatives, the fact that this extension has the possibility of an early exit is crucial, with Johnson desperate to maintain his pledge to 'get Brexit done' at the earliest opportunity."

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