U.K. Prime Minister Theresa May's government narrowly survived a no-confidence vote, dimming the prospects of snap elections just weeks before Britain is scheduled to leave the European Union.
British lawmakers voted 325-306 in support of the government, a day after they overwhelmingly rejected May's Brexit deal in what marked the biggest parliamentary defeat for a government in more than a century.
May was widely expected to win the no-confidence vote proposed by Labour Party leader Jeremy Corbyn in an attempt to bring the government down and force early elections, which May said would delay Brexit.
Sterling held its ground against the dollar today, trading virtually unchanged as of 7:15 p.m. London time, while euro, largely under pressure today, was also little changed. The U.K. FTSE 100 closed 0.47% lower Jan. 16.
After the result, May reiterated that her government would hold cross-party meetings over the next few days, to return to the House of Commons with a revised Brexit deal Jan. 21. Other possible Brexit scenarios include a delayed Brexit, as there have been calls for a second referendum, with Dominic Grieve, a lawmaker from May's Conservative party, filing measures to enable preparations for one.
A no-deal Brexit scenario, which would trigger if a majority in Parliament fails to agree to a single alternative plan that is also acceptable to the EU, could lead to a negative rating action on the U.K., Fitch Ratings said before the Jan. 16 vote. The economic outlook for the country is "highly sensitive" to Brexit developments, according to Fitch.
During the parliamentary debate Jan. 16, May indicated her unwillingness to consider a customs union, which is a Labour demand, during cross-party talks on a new Brexit deal.
In December 2018, May survived a no-confidence vote by her Conservative Party after she postponed the parliamentary vote on her Brexit deal.