British Prime Minister Theresa May will hold an all-important vote on a watered-down version of her Brexit deal on Friday, in a last-ditch attempt to avoid a major delay to the country's departure from the European Union.
May's template to leave the bloc has already been comprehensively rejected twice, but this time it is set to be slightly different.
That's because U.K. lawmakers will only be asked to vote on the withdrawal agreement — rather than the withdrawal agreement and the political declaration, which sets out the future relationship between the U.K. and the EU.
The split means Parliament will not be able to ratify the entire withdrawal package, as the law requires the passage of a so-called "meaningful vote" on both parts of the deal.
The vote, which comes on the day the country had long been expected to leave the bloc, is expected to take place at around 2:30 p.m. London time.
Sterling was trading up 0.6 percent at $1.3120 at around 11:10 a.m.
A failed vote is 'likely' to trigger a general election
The government has said a successful vote on the withdrawal agreement alone would be enough to satisfy EU leaders and secure a postponement of Brexit to May 22.
Earlier this week, May told Conservative MPs (Members of Parliament) that she would resign as party leader after May 22 if her deal was passed. The move was designed to encourage some rebel party lawmakers to get behind her Brexit deal.
May needs to win over 75 rebels to overturn the 149-vote rejection of her EU divorce deal when it was last voted on earlier this month.
However, it is widely thought that May has not been able to secure enough support for her deal.
Some Conservative MPs are expected to rebel against the embattled prime minister once again, Labour and other opposition parties are also set to vote against the agreement and, crucially, the Northern Irish Democratic Unionist Party (DUP) — which props up May's government — has said it cannot get behind the deal.
"The result of a failed vote is likely to be a general election," Peter Chatwell, a rates strategist at Mizuho, said in a research note published on Friday.
A general election "would pose long-term upside risks to gilt yields, as fiscal easing is likely to be a large component of any future government," Chatwell said. Britain has until May 22 to leave the bloc if politicians agree to May's deal, or April 12 if they do not.
If Britain wants to stay longer, it will have to participate in European Parliamentary elections that start on May 23.
A longer delay to Brexit and a leadership battle means more uncertainty for British businesses that have repeatedly criticized the government for having no clear strategy when it comes to Brexit.