It's crunch time for Brexit, and investors are on high alert. British lawmakers were—maybe—set to vote Tuesday on Prime Minister Theresa May's Brexit deal with the European Union, reports the AP. All indications are that she would suffer a major defeat, opening up a dizzying array of consequences that could increase volatility in global financial markets. On Monday, however, the BBC quoted two government sources who said the vote will be canceled. May was expected to clear things up in a speech Monday afternoon. That wasn't the only wrinkle: Europe's top court boosted the hopes of people who want to stay in the EU by ruling Monday that Britain could change its mind about leaving. When an EU member country has notified its intent to leave, "that member state is free to revoke unilaterally that notification," said the European Court of Justice, per the AP.
Britain voted in 2016 to leave the 28-nation bloc and invoked Article 50 of the EU's Lisbon Treaty in March 2017, triggering a two-year exit process. May has worked out a deal with the EU to make that happen, and Britain's Parliament was to vote on it Tuesday. Defeat of May's deal could suggest that Britain is one step closer to dropping out of the EU in March with no deal at all, a worst-case scenario that most economic commentators, including the Bank of England, say would lead to a savage recession. Another possibility: After a defeat of May's deal, Parliament could vote again on a revised version and back it. Or it could coalesce around another Brexit deal that would see Britain retain very close links to the European single market. There could even be a second referendum on Britain's exit from the EU.
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