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Brexit: UK asks EU for further extension

British Prime Minister Theresa May has requested the European Union to delay the United Kingdom’s exit until June 30, 2019. Will the Brexit be delayed further? This depends on the EU’s acceptance of the requisition made by the prime minister. Also, the prime minister was beginning preparations to hold an election for the European Parliament in late May.

Meanwhile, France has reiterated its opposition for granting the country any further Brexit extension. Also, France has cited its previous decision that another extension requires the UK to put forward a plan with clear and credible political backing. In the absence of the plan, it is acknowledged that Britain chooses to exit in a disorderly manner.

The British prime minister said she would order a vote in late May to elect British members of the European Parliament, assuming Britain is still a European Union member, according to The Washington Post. The UK is now scheduled to exit the EU on April 12 and, till now, no withdrawal deal has been approved by the officials.

Image for representation only (Courtesy: Stefan Schweihofer from Pixabay)

Theresa May has proposed that the country’s exit could occur before the European Parliamentary elections on May 23 if the officials approve an agreement in time. But, in case no deal is reached, then the UK would prepare to field candidates in those elections, she said.

On the other hand, reports stated that the EU is preparing to give Britain so-called “flextension” of around a year until March 2020 with a clause to end the extension as soon as a withdrawal deal was in place. This is expected to give some breathing space for delving into repeated short extensions every few weeks.

Either way could be beneficial for the UK retailers, who have expected a gloomy 2019 due to Britain’s departure from the EU. In 2018, almost 20,000 shops and restaurants have been closed in the UK, hurt by increasing business property taxation as well as cut-throat competition from online sellers such as Amazon (AMZN).

Also, the Brexit deal has been majorly depended for a rate cut or a hike by the Bank of England, which happened to maintain UK headline interest rate at 0.75%. The central bank had expected growth of 1.3% in 2018 and 1.7% in 2019 as Brexit has become an important uncertainty in recent months. In the event of a disorderly Brexit, the committee would be forced to lift the interest rates.

 

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