Brexit Bulletin: Judgment Day

Brexit is 37 days away.

(Bloomberg) --

Today in Brexit: The U.K.’s top judges are set to rule on a key part of Boris Johnson’s Brexit strategy.

What’s Happening? The U.K. Supreme Court is just hours away from ruling on the legality of Prime Minister Boris Johnson’s plan to suspend Parliament, a verdict that will help shape the course of Brexit—and his premiership.

The announcement will come at 10:30 a.m in London, when the justices will first decree whether the suspension is even a matter for the courts to review, and, if so, whether Johnson’s motivations were improper. If they do find against the government, the question of what to do then may be the most difficult. Careful not to be seen as overly interventionist, the justices devoted the end of the hearing last week to exploring the consequences of a declaration that the suspension was unlawful.

In fact, what comes next will largely depend on how the prime minister responds should he lose. Johnson could be forced to recall the legislature, giving opponents of a no-deal Brexit time to thwart his plans to leave by Oct. 31. But, as Bloomberg’s Jonathan Browning writes, the picture becomes murkier if the court stops short of making a definitive order and instead issues a simple declaration. Johnson stonewalled questions about what he might do yesterday, saying only, “I’m going to wait and see what the judgment is.”

The case has stretched Britain’s largely unwritten constitution to its limits, igniting a debate over the clout of U.K. courts, the power of any future prime minister and the relationship between the judiciary and the executive. For Brexit-weary investors, however, the ruling is more likely to be a tremor than an earthquake. The verdict, whatever it is, will do little to alter the biggest unknown on the horizon for U.K. markets: the uncertainty over whether Britain will exit the European Union with or without a deal on Oct. 31.

Johnson, meanwhile, will be thousands of miles away. The prime minister is still in New York, where he’s due to continue his push for a Brexit deal on the sidelines of the United Nations General Assembly. Johnson, who has urged the bloc’s leaders to recognize that he has compromised and said they should respond in kind, spoke with European Council President Donald Tusk on Monday. The EU said the 30-minute meeting took place in a positive atmosphere, but saw few signs of a breakthrough. He’ll meet Irish leader Leo Varadkar later today, when he’s also due to speak with President Donald Trump.

Today’s Must-Reads

• Amid chaotic scenes at its annual conference yesterday, Labour party members eventually backed leader Jeremy Corbyn’s wait-and-see Brexit policy. The party is now committed to fighting a general election, renegotiating a deal and then holding a referendum to allow voters to support that deal or opt to remain in the bloc.
• Still, Corbyn’s victory, which angered many of Labour’s pro-remain figures, will come at a price, Camilla Tominey and Harry York write in the Telegraph.
• Leaders across Europe are questioning whether Johnson really is a man they can do business with, Bloomberg’s Ian Wishart, Arne Delfs and Dara Doyle report.

Brexit in Brief

EU Pessimism | EU chief Brexit negotiator Michel Barnier offered a bleak outlook for a resolution on the so-called Irish backstop issue Monday. He told reporters in Berlin that, based on current U.K. thinking, “it is difficult to see how we can arrive at a legally operative solution.” And Ireland’s Varadkar said in New York that the nation won’t accept a “halfway house” on how the Irish border will be managed after Brexit, reiterating the need for legally binding assurances on any arrangement to replace the backstop.

U.K. Optimism | Still, the U.K. is striking a more upbeat tone, with Health Secretary Matt Hancock telling LBC radio yesterday that a Brexit deal is now “more likely than not,” due to the shifting stance of the EU on renegotiating the withdrawal agreement.

Billions at Risk | Although initial fears that London would lose thousands of financial-services jobs because of Brexit haven't come to pass, the process has already taken a toll on the industry. Bloomberg's Silla Brush and Viren Vaghela take a look at the risks and realities.

Bond Stampede | U.K. companies are rushing into Europe’s bond market, taking advantage of what may be a last chance to lock in low-cost financing before renewed Brexit upheaval.

Business Plea |  With the chance of a no-deal Brexit still hanging over corporate Britain, business lobby groups are continuing to bang the drum for certainty. Companies are facing “the potential for a messy and disorderly exit on Oct. 31,” British Chambers of Commerce Director General Adam Marshall said in a Bloomberg TV interview yesterday.

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To contact the editor responsible for this story: Anne Swardson at aswardson@bloomberg.net, Leila Taha

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