Bank Stocks Move Down As Brexit Hangs In The Balance

The UK decision to leave the European Union, often referred to as Brexit, appears to be on hold after British Prime Minister Theresa May postponed a scheduled parliamentary vote on her Brexit plan that was scheduled for Tuesday.

What Happened

May announced the postponement Monday in an address to the House of Commons, and the PM will now begin to open negotiations with the EU to strike a better Brexit deal that would be brought to a future vote. Parliament was expecting to vote to either accept or reject May’s existing Brexit plan on Tuesday.

Why It’s Important

May said Monday that her current Brexit plan was the absolute best option for the UK, but that she will push for a better deal related to the so-called Northern Irish "backdrop" that prevents the formation of a physical border seperating Ireland and Northern Ireland.

"I will hold emergency talks with EU leaders to discuss possible changes to backstop," the PM said. 

May has previously warned that if the Brexit deal were to be voted down, it could ultimately result in the UK opting to scrap Brexit completely and Labour Party leader Jeremy Corbyn gaining even more influence.

May said she remains committed to getting a Brexit deal done.

"Even though I voted remain, from the moment I took up the responsibility of being prime minister of this great country I have known that my duty is to honor the result of that vote." 

UK media reports have suggested May’s plan would have likely been voted down, putting her political future at risk and potentially destabilizing the British government. Corbyn has said that delaying the vote would demonstrate that the UK “doesn’t have a functioning government.”

The pound plunged to its lowest levels in more than a year as the UK’s future hangs in the balance.

What’s Next

Investors will be watching the volatile pound and the stability of the London Stock Market as uncertainty lingers in one of the world's largest financial hubs.

Bank stocks were tanking at the time of publication Monday ahead of potential lingering volatility in the UK market:

• Financial Select Sector SPDR Fund XLF was down 2.69 percent. 
• Bank of America Corp BAC was down 3.83 percent. 
• Deutsche Bank AG DB was down 5.15 percent. 
• Citigroup Inc C was down 3.56 percent. 
• JPMorgan Chase & Co. JPM was down 2.92 percent. 
• Wells Fargo & Co WFC was down 3.42 percent. 
• iShares MSCI United Kingdom Index EWU was down 1.85 percent.

Related Links:

GBP/USD Forecast: The Government Losing A Parliamentary Vote Is Sterling Bearish

Everything You Need To Know About The Brexit