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It was the government’s intention to trigger Article 50 of the Lisbon Treaty and begin exit-negotiations before the end of March, based solely on the outcome of the referendum, using its constitutional powers to do so; however, the court has ruled that this is unconstitutional. Should MPs be given the opportunity to vote on the matter, any form of Brexit could be tied up in legislation for months or years to come.
While the government has said that it will appeal the decision in the Supreme Court, the ruling today has added even more uncertainty, both political and economic.
The pound jumped by 0.8% as soon as the ruling was announced. The Bank of England’s monetary policy committee then announced that both interest rates and quantitative easing would remain unchanged, leading the pound to climb to 1.44% on the day.
Sterling’s volatility is having a significant impact on the IT industry with the majority of US vendors having already raised their prices in the UK in order to offset currency variations. Microsoft recently announced that it was to increase its cloud services by 22. HPE, Asus, Dell and Lenovo have also increased their prices. Increased volaitity is expected as the appeal plays out.
While investors are busy trying to understand the long-term ramifications of the ruling, UK businesses will likely not welcome further uncertainty.
The government remained quiet following the ruling, but a spokesperson stated that it was “disappointed by the Court’s judgment.”
“The country voted to leave the European Union in a referendum approved by Act of Parliament. And the government is determined to respect the result of the referendum,” the spokesperson said, adding: “We will appeal this judgment.”
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