The New British Prime Minister and the Brexit Conundrum
New British Prime Minister is reluctant to invoke Article 50 of the Lisbon Treaty
Until recently, global financial markets were rocked by the Brexit decision. The political vacuum that ensued did little to reassure investors, but that has all changed. The incoming British Prime Minister, Theresa May (former Home Secretary) officially replaced Prime Minister David Cameron on Wednesday, 13 July 2016. In a solemn address to Parliament, Prime Minister Cameron bade farewell to his countrymen and fellow MPs and welcomed the new leader of the Tory party, Theresa May. But her position on Britain’s exit from the European Union is likely to land her in a spot of bother with Europeans pushing for a speedy British exit from the EU.
In order for Britain to initiate divorce proceedings from the EU, Article 50 of the Lisbon Treaty must be invoked. Triggering this is akin to opening a can of worms, because nobody knows quite what will transpire when the extrication process begins. As such, spread betting companies are seeing bettors going short on the option of May triggering Britain’s exit. Bookmakers believe that she will not act in 2016, and perhaps only initiate proceedings well into 2017. The odds are certainly unfavourable for the 2-year notice period being adopted by this Prime Minister any time soon. They range anywhere from 6/4 or higher for the Brexit to become official by 2018 or never.
May wins majority of Tory MP votes
Theresa May got the nod from party members and was elected the leader of the Tories on Monday. This occurred after Andrea Leadsom relinquished her leadership bid. Within a few hours, Prime Minister David Cameron stated that he would be stepping down on Wednesday, 13 July. Recall that the UK was supposed to elect a new Conservative Prime Minister in September 2016. However, the upheaval created by the political vacuum necessitated an expeditious end to the leadership vacuum. Despite her misgivings about the impact of a Brexit, Theresa May stated that Brexit means Brexit. Further, she made it clear that under her leadership the UK would negotiate its way out of the European Union. There is a great degree of skepticism about this however, given her position in the highly charged referendum.
In spite of her promises bookmakers remain unconvinced
Her popularity among party insiders has never been in doubt. She easily won 2/3 of voting rounds among Tory MPs. Even before her chief rival gave in, many Brexiteers threw their support behind Theresa May. Nonetheless, it appears that bookmakers are less convinced about Article 50 being triggered any time soon. Examples of betting odds include the following: April 1-June 30, 2017 at odds of 9/2, January 1-March 21, 2017 at odds of 4/1, October 1-December 31, 2016 at odds of 3/1 and 2018+ or never, at odds of 6/4. But bookmakers are not resting on their laurels with Theresa May’s leadership of the Tory party. There are now betting odds on who will likely succeed her, including former London Mayor Boris Johnson. Odds of him stepping up are at 10 to 1 while odds of Michael Gove stand at 12 to 1.
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About Brett Chatz
Brett Chatz is a graduate of the University of South Africa, and holds a Bachelor of Commerce degree, with Economics and Strategic management as his major subjects. Nowadays Brett contributes from his vast expertise in online trading for spreadbettingreview.co.uk.