U.K. Members of Parliament backed a bill Wednesday aiming to block a no-deal Brexit, ensuring a three-month extension to the Brexit deadline and ruling out Prime Minister Boris Johnson's intention to exit the European Union under any circumstances by Oct. 31.
The bill is pending approvals from the U.K. House of Lords and the Queen of England, the so-called Royal Assent.
Also, in a vote Wednesday, MPs defeated Mr. Johnson's motion to hold a snap general election 298-56, earlier proposed by Mr. Johnson to take place ahead of the EU summit on Oct. 17. The pound sterling rose 0.71% against the dollar in Thursday's morning hours to $1.23, while the FTSE All-Share index fell 0.55%.
"(The pound) sterling is expressing cautious sense of optimism in response to last night's events. The threat of a chaotic no-deal exit has not been fully removed, but is rapidly receding," said Elliot Hentov, head of policy research at State Street Global Advisors, via email. "Only the setting of an election date of a new government beyond Oct. 31 will fully remove this imminent risk," he said.
Members of Parliament are seen standing fast against holding a general election unless a three-month delay is "guaranteed and non-reversible," said Esty Dwek, head of global market strategy and dynamic solutions at Natixis Investment Managers.
"A version of Mrs. May's deal could still get approved, and if Mr Johnson does win the election, that may be what he is hoping to achieve, though he has seemed increasingly comfortable with no-deal exit," Ms Dwek said. "We still see a no-deal as a lower probability outcome, but cannot exclude it entirely."
