Brexit Update – The Tory Party Conference Begins. Can Johnson rally the Troops？

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Its the 30th September which is the French – Finnish imposed deadline for Boris Johnson to submit alternative proposals to the Irish backstop.

Over the weekend, news hit the wires that the Democratic Unionist Party were willing to consider a time-limited backstop. A time-limited backstop had previously been pushed out, however. The UK would remain within the EU customs union in such an event in order to prevent a hard border with Ireland. For Boris Johnson, it has always been a case of a removal of the backstop.

A possible solution, which the British PM may propose, is for checks beyond health inspections for food and animals between at the Northern Ireland – Mainland border and any customs border in the Irish Sea.

While DUP leader indicated a willingness to support a time-limited backstop, she spoke over the weekend of an unwillingness to support extra border checks.

As things stand, with the Tory Party Conference underway, it appears as though the British PM has few alternative solutions to the backstop puzzle.

MPs see DUP support to any deal as a must. If the DUP aren‘t supportive of additional checks, the consensus is that MPs are unlikely to vote through a deal. It’s an even taller order when considering the fact that the Johnson doesnt have a majority.

The real question remaining is whether the British PM will request an extension as required by law.

Theres been plenty of talk of the British PM ignoring the Benn Act and delivering a no-deal Brexit on Halloween.

Assuming that Johnson fails to deliver a viable alternative to the existing backstop deal, Johnson may have managed to get the support of EU member states to vote down an extension to 31st January of next year. That seems to be the message, or possibly, the threat…

That would leave Johnson in the clear, legally, and also deliver on Brexit, which was his pledge in taking office.

The Pound

At the time of writing, the Pound was up by 0.03% to $1.22915.

For the day ahead, chatter from the EU and the Tory Party Conference will influence.

It wont just be geopolitics on the day, however. 2nd quarter GDP numbers and sentiment towards monetary policy will also provide direction…

What Lies Ahead？

With the Tory Party Conference underway, Finland and France seem unlikely to be satisfied with the lack of proposals.

Expectations are that the British PM will submit alternative proposals following the Tory Party Conference on Thursday.

While neither France nor Finland has any power to act on Britain‘s failure to deliver today, it could support Johnson’s hope that EU member states vote down any extension requests.

When considering the length of time passed, the level of Brexit uncertainty remains significant.

Its not too surprising that the Pound has fallen back to sub-$1.23 levels. This week is another crunch time for the British PM. The Pound is likely to be on yet another rollercoaster ride this week.

For the week, while is there Brexit and British politics is key, economic data will also influence.

Dire numbers would fuel speculation of an imminent BoE rate cut. Throw in the prospects of a no-deal Brexit and that could spell sub-$1.20 for the Pound…