Theresa May says to trigger EU divorce by end of March, sterling falls

Prime Minister Theresa May said she would trigger the process to leave the EU by the end of March, offering the first glimpse of a timetable for a divorce that will redefine Britain's ties with its biggest trading partner.

Britain's shock vote to leave the European Union in June propelled May to power and the former interior minister has been under pressure to offer more details on her plan for departure, beyond an often-repeated catchphrase that "Brexit means Brexit".

In a move to ease fears among her ruling Conservatives that she may delay the divorce, May told the party's annual conference in Birmingham, central England, on Sunday she was determined to move on with the process and win the "right deal".

Using Article 50 of the EU's Lisbon Treaty will give Britain a two-year period to clinch one of the most complex deals in Europe since World War Two.

"We will invoke Article 50 no later than the end of March next year," May told the conference to cheers from hundreds of members. "Parliament put the decision to leave or remain inside the EU in the hands of the people. And the people gave their answer with emphatic clarity."

"So now it is up to the government not to question, quibble or backslide on what we have been instructed to do, but to get on with the job," said May, keen to reassure lawmakers that she will deliver Brexit despite her earlier support, albeit quiet, for a "Remain" vote in the referendum.

Sterling fell to a three-year low against the euro and within a cent of a three-decade trough against the dollar on Monday while some investment banks said May's comments indicated Britain could be heading towards a "hard Brexit".

While May dismissed the idea that Britain faced a choice between a "soft" or "hard" Brexit, JPMorgan said her comments indicated the latter - meaning Britain could abandon the EU's customs union, give up on seeking preferential access to the single market and impose controls on immigration from the bloc.

"Although May does not like the 'hard-soft' distinction, this looks pretty 'hard' to us," JPMorgan said in a note to clients.

BREXIT DETAIL?

May's comments were welcomed by the EU, with Donald Tusk, the president of the European Council, saying the statement had brought "welcome clarity" to the situation.

Lawmakers in German Chancellor Angela Merkel's conservative party made similar remarks but some expressed frustration at the lack of detail on the timetable.

"Finally there is a position," lawmaker Elmar Brok said. "It would be important that the Brexit is done before the next election for the European parliament", due in early 2019.

"The British government has shown that it is clueless about what to do," said Gunther Krichbaum, leader of the European committee in the Bundestag lower house.

One senior German official said: "It is beyond comprehension that the politicians who campaigned for Brexit for months have no idea what they want, they have no plan at all."

UNCERTAINTY

Britain's decision to leave the EU on June 23 sparked turmoil in financial markets as investors tried to gauge its impact on both the world's fifth largest economy and the bloc.

Finance minister Philip Hammond said Britain needed a new fiscal plan to navigate the economic turbulence caused by the referendum vote, stressing the need to balance spending cuts with infrastructure investment.

"There will be a period of a couple of years or perhaps even longer when businesses are uncertain about the final state of our relationship with the European Union and during that period we need to support the economy," he told BBC TV on Monday.

The country's allies fear that its exit from the EU could mark a turning point in post-Cold War international affairs that will weaken the West in relation to China and Russia, undermine efforts toward European integration and hurt global free trade.

For some businesses, May's reluctance to offer what she describes as a "running commentary" on her strategy, has deepened fears that they could end up paying higher costs if operating from Britain.

But May said she could not risk a good deal by putting her strategy under continual scrutiny.

"Every stray word and every hyped-up media report is going to make it harder for us to get the right deal for Britain," she said. "So we have to stay patient. But when there are things to say - as there are today - we will keep the public informed and up to date."

For many of her lawmakers, the announcement hit the mark.

"The timing is just right," Conservative lawmaker Andrew Bridgen told Reuters, saying voters had understood that the new prime minister had needed some time to prepare her position.

Others said they feared that triggering Article 50 so early could put pressure on Britain as elections in France and Germany in 2017 could change London's partners in the middle of talks.

Unwilling to give too much away, May said her government must respond to the demands of voters, many of whom fear that hospitals and schools are being stretched by high levels of migration from the EU, but also had to listen to business.

"I know some people ask about the 'trade-off' between controlling immigration and trading with Europe. But that is the wrong way of looking at things," she said.

Underlining her point, close ally, trade minister Liam Fox - one of three leading Brexit campaigners in her cabinet - told an event at the conference: "What we want is the best exit for the United Kingdom, not the quickest."

'GREAT REPEAL ACT'

But it was her move to repeal the 1972 European Communities Act next year, a law that took Britain into what is now the EU, and make Britain "a sovereign and independent country" that received the loudest cheers from her audience.

Some members of her Conservative Party said that what May has billed as the 'Great Repeal Act' was little more than a technicality, but many others said it was the first step for Britain to reclaim power and dispense with some EU regulation.

"I'm rather looking forward to being a sovereign parliament again ... to dealing with EU legislation and removing unnecessary laws and streamlining it," said Bridgen.

Describing himself as an "ardent Brexiteer", Bridgen said by repealing the act, Britain could help businesses by dispensing with EU regulation "which puts them at a disadvantage".