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Letwin amendment passed – what happens next

Boris Johnson forced to ask for an extension.

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

‘Super Saturday’ didn’t quite go as planned for Boris Johnson. Parliament didn’t even get to vote on his deal.

The Letwin amendment – aimed at withholding Johnson’s deal until parliament can pass the laws needed enact it – was passed by a majority of 16. 322 to 306.

This overruled the vote on the deal itself.

After the amendment was passed, the PM was forced to send a letter to the EU asking for an extension. After saying he’d “rather be dead in a ditch” than ask to delay Brexit, he sent the letter, unsigned, and explained “this is Parliament’s letter, not my letter”.

Johnson followed the extension request with a signed letter including his own views, and said “a further extension would damage the interests of the UK and our EU partners”.

What next?

Johnson will wait to see how the EU responds to his letters. For an extension to be granted, all 27 EU member states have to approve.

A refusal to extend means Johnson will need to work quickly to see his deal through before 31 October.

If the EU does give him the extension, we might be looking at another few months of uncertainty.

What does it mean for the UK stock market?

If nothing else, Saturday’s shown us that there still aren’t any certainties when it comes to Brexit.

As investors, that keeps us in limbo.

Last week, companies that rely heavily on the UK economy – from banks to housebuilders – had a fantastic run, propped up by the news Boris and the EU had agreed the deal.

We might see these companies give up some of those gains, as we slump back into unknown territory.

On the other hand, anything that sees us get closer to a deal next week could continue to offer the much-needed buoyancy to UK companies that make most of their money at home.

What should investors do?

When it comes to practical tips, a well-diversified portfolio by its nature is set up to help weather a range of outcomes. If the UK market turns south, or sterling falls, hopefully your global investments will pick up the slack. Likewise if we get a Brexit outcome that the market likes, UK domestics could finally get a chance to shine after years in the shadows.

What we do know is that timing your buys and sells can be more than tricky – and the cost of getting it wrong increases in volatile markets. This is why we always suggest investors think twice before making snap decisions. That said, holding a small portion of cash in your portfolio isn’t a bad idea, as it could let you pick up a bargain if the market falls, although remember it could fall further.

As ever we’ll be keeping a close eye on developments in Westminster, and will update you with our views as soon as we can.

This article isn’t personal advice. If you’re not sure an investment is right for you, seek advice. Unlike the security of cash, investments rise and fall in value, so you could get back less than you invest.

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Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

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