The UK's pound sterling plummeted this week after Prime Minister Boris Johnson revealed his plans of suspending Parliament in an alleged attempt to block a no-deal Brexit. Johnson had approached Queen Elizabeth II regarding the matter.
The Queen approved the request to suspend Parliament on Wednesday.
The news of the approval was met with intense opposition from a number of politicians, most of who have claimed that Johnson's actions were unconstitutional and undemocratic.
Shortly after Johnson had confirmed his intention of suspending Parliament, the sterling immediately dropped. The drop on Tuesday erased any earlier gains made in the previous days following the positive outcome of the G7 meeting.
The pound fell by as much as 1.1 percent, the most it has dropped in over a month. The currency dropped 0.7 percent lower to the dollar at $1.2206, while it weakened by the same percentage to the euro. The UK's 10-year bonds fell to 0.46 percent amid expectations of a UK rate cut.
Equities also reacted to the suspension news and the drop in the value of the pound sterling. UK companies that earned mostly in US dollars, including Compass Group PLC and Smith & Nephew PLC, experienced spikes this week. Meanwhile, stocks sensitive to UK political sentiments such as Taylor Wimpey PLC and Barratt Developments PLC, saw their prices drop.
The UK parliament was previously scheduled to return from a summer break on September 3rd. However, with the queen's approval, Parliament will now be suspended until October 14, for the queen to give a speech on the country's domestic agenda in the House of Lords.
According to political experts, Johnson's move will greatly constrain parliament, but they are apparently still not out of the game. Some lawmakers have reportedly mentioned that they are willing to meet somewhere else if Parliament will indeed be suspended.
Johnson, for the most part, has denied that the suspension had anything to do with trying to undermine Parliament. According to the official, Brexit is still due to happen on October 31, which should be enough time to debate the issue.
Johnson had previously promised that the UK will still leave the European Union by the end of October with or without a deal.
Johnson's sudden move to suspend Parliament has been met with protest from the public as well. A large number of protesters made their way outside the UK parliament on Wednesday evening. Authorities estimate that more than 1,000 protesters were present in the area. Some of the protesters were holding signs that called for Johnson's removal.
