U.K. Prime Minister Theresa May is likely to invoke Article 50 in early 2017, according to a Bloomberg News report from Friday.
On June 23 the U.K. voted to exit the European Union, but article 50 has yet to be enacted. Article 50 of the Lisbon Treaty outlines how a country can voluntarily leave the EU. Triggering the article marks the start of formal negotiations with Brussels over the U.K.’s exit from the European Union and the decision cannot be revoked. Earlier media reports had suggested May would wait until later in 2017 to kick off the talks.
The new report suggests starting the process by April, ending speculation that the U.K. would have several years to prepare to leave the EU. The less time the U.K. has to get things in order, the greater the market fears the fallout
Sterling slumped to $1.3058, from as high as $1.3164 earlier in the day. Against the euro the pound dropped to €1.1536, down from €1.1614.
From a political perspective there is a strong desire to initiate Brexit in the first part of next year. European leaders including Germany’s Angela Merkel have accepted that Britain will need time to decide how it wants to work with the EU in future. Their patience is likely to have limits. Merkel and French President Francois Hollande both face elections next year and are unlikely to want an extended period of uncertainty threatening their economies as they campaign for votes.