STERLING slipped back a little yesterday after its strongest one-day gains in more than three months on a trade-weighted basis, having been boosted after a U.K. government lawyer said parliament would have to ratify any deal to take Britain out of the European Union.

    Having fallen to a record low last week on worries that Britain would undergo a “hard” exit from the EU, in which access to the single market was sacrificed for the sake of tighter controls on immigration, the Bank of England’s trade-weighted sterling index rose 1.4 percent Tuesday.

    Against the U.S. dollar, it reached a one-week high of US$1.2326, but traded a little under that by press time yesterday, down 0.1 percent on the day at US$1.2281.

    Lawyer James Eadie, who is representing the government in a High Court challenge over who has the right to trigger the divorce process between Britain and the EU, said Tuesday that parliament — not just the ruling Conservative government — would “very likely” have to ratify any Brexit agreement.

    “That helped to improve sentiment towards the pound so we had a modest relief rally yesterday,” said Bank of Tokyo-Mitsubishi UFJ currency economist Lee Hardman.

    “But for that upward momentum to be sustained and for us to see a larger rebound we’d need to see the courts rule that parliamentary approval is required for triggering Article 50 — in our view that’s more important and the market would be more sensitive to that development.”

    London’s High Court said Tuesday it would rule “as quickly as possible” on whether parliament in its entirety must trigger Article 50, which starts formal divorce proceedings.

    With markets focused on political developments, they are less sensitive than usual to economic data.

    (SD-Agencies)