The pound against the US dollar (GBPUSD=X) started to inch higher after it was confirmed that Britain will have another general election on 12 December.
In a late session Tuesday night, MPs voted 438 to 20 to approve legislation for a snap general election. It will mark the third general election since 2015 and could mean the fourth UK prime minister in just four years.
The pound is moving into positive territory but the snap general election is likely to be seen as a realistic way of breaking the Brexit deadlock.
The last week has been organised chaos in the UK.
Following an extraordinary session in UK parliament over the last weekend, prime minister Boris Johnson’s Brexit plans were in disarray. Members of Parliament (MP) backed a motion to further delay the process of Britain leaving the EU and Johnson was forced to ask the 27-nation bloc for a Brexit extension — something he has repeatedly said he didn’t want to do.
The EU then granted a second Brexit extension to the UK — making it nearly a year to the date that Britain was meant to leave the bloc.
While former prime minister Theresa May sealed a deal with the EU, she repeatedly failed to get it through parliament. Johnson sealed another deal with the EU and also failed to gain full support from parliament to push it through.
A new election could see a ruling party, such as the Conservatives, gain a greater majority and therefore have enough seats to push through votes for the Brexit deal.
However, the bill is still to be approved by the House of Lords but it could become law by the end of the week. If this does happen, then there will be a five-week campaign up to the day of the election.