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The Credit Cruncher was conceived to help you to keep up to date with credit crunch and recession developments, it provides some helpful credit crunch advice and it addresses personal debt. The Credit Cruncher also seeks to explain how the credit crunch started and shed some light on the worldwide recession. Recently, we have begun to look at how BREXIT will affect the UK economy. Please feel free to leave comments where relevant.

3 Nov 2016

Court Ruling on BREXIT

Today, the High Court has ruled that the UK will not be able to trigger article 50 [needed to exit the EU] without debating it in Parliament.

It was Theresa May who has suggested she could trigger article 50 without the agreement of Parliament that has bought this legal challenge about. It is no real surprise that the court has ruled in this way, but this is a significant development on the road to leaving the EU.

Having to debate in Parliament, [with scant BREXIT support] could mean that a 'hard exit' is out of the question, as it is difficult to see the UK Parliament supporting anything less than the softest of exits. In fact it may well mean that the UK exit is almost indefinitely postponed such is the distance between what Parliament wants and what the referendum has asked for. It is hard to envisage the type of agreement that could appease enough MP's to get an agreement.

The next issue will be that once article 50 is triggered, the PM has to take a conditional 'soft' exit idea to Brussels and get the EU to agree it. An educated guess says this will not happen, so presumably there will need to be further debates and discussions back in Parliament. The danger here is that ironically we may still end up with a 'hard' exit as a default position once article 50 is triggered and no agreement can be reached.

The Government (a bit bizarrely in my opinion) will appeal against todays ruling, so speculation is a little premature at this stage. However, having originally thought 'surely this means a soft exit is the only option', having thought it through, I believe this could actually end with time being called on article 50 and a hard exit being forced by the EU.

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