The Supreme Court’s decision to force the government to allow a vote on triggering Article 50 has provided scant consolation to the pound, which has extended losses in volatile trading.
Sterling fell to lows of $1.2438 against the US dollar at the time of publication in response to the ruling. It had risen sharply ahead of the ruling, but wiped out all gains.
The pound has gained in recent months on signs of a “soft” Brexit but the court’s judgement failed to reassure traders, despite offering a chance for amendments to a bill triggering Article 50 from pro-EU MPs and Lords.
However, the move downwards in the pound following the decision suggests traders had already priced in the probability of a vote in Parliament. Analysts said the decision that the devolved legislatures did not need a vote was behind the move downwards.
A requirement to consult the devolved legislatures, particularly in Scotland, was seen by many as a path towards a “soft” Brexit. The Scottish National Party, which is the biggest party in Holyrood, is vehemently opposed to Brexit.
The decision on devolved legislatures means “Leavers among the Tory party were dealt the softest blow of the possible outcomes,” said Connor Campbell, an analyst at Spreadex.
Investors will now look to the bill put forward on Brexit in the Houses of Parliament for further detail on the likelihood of MPs being able to soften the terms of leaving the EU.
“There does not appear to be any stipulation from the Supreme Court detailing the requirements of such a bill,” said Victoria Clarke, an economist at Investec. “As such the government’s plan stated ahead of the hearing, to put a short bill to Parliament, continuing to work towards the triggering of Article 50 by the end of March, looks to remain valid."