Theresa May is triggered and whispers have grown louder that she’s about to trigger this Article 50 early in the new year. This is all very poor rumour material. Of course she’s going to do it soon. She has to. The question is – what will happen then?
Twitter is alive with speculation that Article 50 – the mechanism that will put in motion the negotiations that will disentangle the United Kingdom from the European Union – will be triggered early next year. As per usual it is the Russian media outlet Russia Today that is leading the charge in stating the obvious. Moscow has an axe to grind with London over a few unsettled debts over oil prices and the whole Cold War mark two they are having in Syria, but on the principle that my enemy’s enemy is my friend we won’t give Putin too much of a hard time. The truth of the matter is that Britain has already overextended its line of credit in Brussels and has been backed into the position of having to jump or be pushed.
Brexit 2017? Increasingly likely Article 50 will be triggered early next year rt.com/uk/360843-brex…—
Аrthur Stramash (@ArthurStramash) September 27, 2016
Theresa May cannot afford to be seen to be pushed and so it is a safe bet to say that the big red Brexit button will be pushed early in the new year; probably no later than March – or April at a stretch. So there is really nothing to be getting excited about. Russia Today is only sensationalising the obvious. The real story is in guessing what will actually happen when Article 50 is triggered. Not everything can be known, but what is most likely from what is already in effect is that the pound sterling will continue to plummet against the euro and the dollar – likely taking a steeper downward trajectory as it did immediately following the Brexit vote. Two years of negotiation will do precious little to rally confidence in the pound.
This is a blessing and a curse. It means that British goods and services will be cheaper and thus more attractive to the European market, but it also means that the cost of imports to the UK will rise. Basic foodstuffs, along with other essentials that are imported from the EU will become more expensive. You’ll remember the Leave campaign’s mantra that “we buy more from the EU than it buys from us?” Well, slogans like this are looking a lot sillier now. All this does is underline how dependent the UK is on the common market, and now – that we all know how much we buy from Europe – that is set to become a great deal more expensive. Ironically, this will hit the typical Brexit voter harder than it will the moneyed class.
Mrs. May has no alternative now but to play this with a hard nose. Her position as leader of the Tory Party and as Prime Minister is weak, and she will not allow herself to be pushed around by her soon-to-be former friends on the continent. This indicates strongly that – as has been hinted at from her recent behaviour with her cabinet at Chequers – she will take the jump; that is with her being the one to announce dates and pretend to set the terms that everyone knows Brussels has already done. The announcement of Article 50 will be a face-saving exercise for Downing Street. What remains unknown and most worrying is how firm a stand she will take on Scotland. A hard Brexit is unavoidable for the rUK, but will there be softer options for a Scotland that has already rejected it?