Sterling fell and then recovered some of the losses following the Supreme Court’s ruling as the judges’ decision casts a pall of uncertainty over the triggering of Article 50. We've seen the pound move around a lot on these kind of political decisions but just how will the Supreme Court's decision affect the pound?

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Uncertainty

Just days after we got the clear-cut message from Theresa May that Britain is heading out of the single market, this ruling means Remainer MPs could start to demand some concessions, which means more uncertainty. But MPs ought to back the government’s plans to exit the EU following last week’s Lancaster House speech, which looks to have pre-empted this court judgment pretty cleverly.

May has already got MPs to back a motion to trigger Article 50 by the end of March and that means this Act of Parliament should get hurried through the Commons pretty quick. MPs on both sides say they will respect the will of the referendum so this ought to be a formality. The issue of the single market was a non-starter – Britain cannot remain in the single market without accepting free movement of people (which it could not sell to voters) and May’s admission of this a week ago was a welcome dose of reality which lifted the pound. It might not stop Remainers from attempting to tie the government’s hands with a series of amendments but realpolitik should prevail. The government cannot go into negotiations with anything but a free hand, and then put the deal to parliament.

Concessions

Could we end up with a soft Brexit? Labour says it will table amendments to ensure tariff-free single market access. The success or failure of these kinds of motions will be important as there just might be enough support in parliament to force May into a softer stance. A soft Brexit would be a lot more positive for the pound.

Scotland

It’s particularly good news for the PM in the short-term that she doesn’t need to consult the devolved parliaments of Scotland and Northern Ireland. The big worry is that this now can be used as the leverage the SNP needs to force another referendum on Scottish independence. Now that would be very sterling-negative.

As such, the SNP has said it will table 50 amendments in order to derail the triggering of Article 50.