1. Parliament to vote on triggering Article 50
Last week the High Court ruled that the Government couldn’t trigger Article 50 and start the process of formally leaving the EU without consulting Parliament. The campaign was led by London-based investment manager Gina Miller, who claims she doesn’t want to challenge Brexit but wants the legal process to be carried out correctly. As the result of EU Referendum is only advisory and not binding, the successful argument put to the High Court stated that leaving the EU would effectively overturn at least one act of Parliament, which is unconstitutional. The ruling reiterated the sovereignty of Parliament and its need to be consulted on these matters.
The Government has confirmed it will challenge the ruling in the Supreme Court. Even though unlikely, there’s a chance it will end up going to the European Court of Justice, currently the highest court in Britain.
Will it impact on Brexit?
Many have suggested this is the wealthy elite challenging the outcome of the Referendum but it would be extremely difficult for Parliament to outright reject Brexit. They are there to enact the people’s will so going against the Referendum result would be considered highly undemocratic. It’s likely to mean Britain gets a softer Brexit than the Government is currently gunning for. A majority of MPs are pro-EU, therefore the strategy for Brexit is likely to be diluted because the Government will have to submit a proposal that MPs wouldn't revolt against.
A potential outcome of the ruling is an early general election taking place sometime next year. Theresa May will set out the Government’s plan for Brexit and if she has trouble passing it through Parliament, she could call an election to gain a fresh mandate from the people for her strategy. The Conservatives have opened up a 14 point lead over the Labour Party in the polls, so it could be a good time to have an election.
What happened to the markets?
On the announcement of the High Court ruling, the pound rose against the dollar and confidence in the markets increased, as most speculators believe the decision decreases the chances of a hard Brexit - therefore Britain would maintain reasonable access to the single market. The pound rose to a four-week high against the dollar and even if Theresa May still pursues a hard Brexit, this ruling will make her fully clarify her position before negotiations start, which businesses are keen for.
Questions to ask yourself... Should wealthy individuals get involved in legal processes? Should referendum results be legally binding?
2. America set to vote for a new President
On Tuesday, the American people will go to the polls to decide on whether Democrat Hillary Clinton or Republican Donald Trump will be their 45th President. After months of debates, rallies and speculation, 120 million Americans are expected to vote in this landmark election. Clinton has a lead in the polls but Trump is making headway in some key swing states.
Not sure what’s going on? Here’s our guide to the American election.
The result is expected to be announced very early Wednesday morning, so keep an eye on global stock exchanges and currency markets this week because there’s likely to be volatility whatever the result.
Questions to ask yourself... What would happen to markets if Trump wins? Is it fair that a few swing states will effectively decide the result of the election?
3. What happened to the British economy?
The Bank of England held one of its regular meetings last week. The main takeaways were that it said the economic fallout from the Brexit vote hasn’t been as bad as it anticipated. However, it also predicted that inflation (a.k.a. the rate at which the price of things increase) would likely rise significantly next year. This would hit people’s wallets as things get more expensive – meaning they’ll buy less stuff (which, of course, is bad for retailers that sell things to consumers). In short, the UK economy is doing better than thought, but it’s far from out of the woods yet.
There was some slightly concerning news for the UK housing market as an important survey suggested that, on average, prices didn’t rise between September and October (although prices are still about 4% higher than they were a year ago). The fear is that the uncertainty created by the Brexit vote, and the hit to people’s wallet’s discussed above, will weigh on house prices in the coming year.
Questions to ask yourself... What are the biggest long-term risks of Brexit for the British economy? Is a decrease in housing prices universally bad for the British economy?
4. The oil price is having a rough time
The oil price fell back to levels last seen about six weeks ago. The problem is that a supposedly big deal between a cooperative of oil-producing countries (a.k.a. OPEC) to limit production looks like it’s in jeopardy (and if they were to limit supply, it would be good for the oil price). As the oil producers struggle to agree on the details the oil price is falling - which hurts the stock prices of energy companies and currencies of countries that produce lots of oil (among other things).
5. And finally…
Facebook’s stock sold off as it signaled it would stop increasing the number of ads in your newsfeed and shift its focus to video (though investors aren’t sure the shift will be successful). Its strategy further threatens traditional media companies, who are already competing with increasingly popular streaming services such as Netflix.
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