LONDON — The pound held steady at $1.21 on Tuesday night as Britain took a giant step toward a general election and as Members of Parliament seek to outlaw a no-deal Brexit.
MPs voted 328 to 301 in favor of drawing up legislation that would block Prime Minister Boris Johnson from taking Britain out of the European Union without a deal on Oct. 31, the latest Brexit deadline.
They plan to pass a law in the next few days that would force Johnson to delay Brexit — once again — until Jan. 31, unless he can come up with a viable exit deal.
Johnson ran his Tory leadership campaign on a promise to take Britain out of the EU on Oct. 31, “no ifs, ands or buts,” and he has repeatedly said he will never ask the EU for another “pointless” extension.
Three years ago, Johnson campaigned hard to quit the European Union, and believes the British government should respect the result of the controversial referendum.
If MPs succeed in outlawing a no-deal Brexit and force Johnson to ask for another extension, he will call a general election as early as Oct. 15. That election would be Britain’s third in five years. Johnson has repeatedly said he doesn’t want an election, and he doesn’t think the British people want one either.
The pound has been particularly jittery over the past two days, with markets fearing the prospect of a general election.
Earlier on Tuesday, the currency dipped briefly to a three-year low of $1.19 before easing back up to its current level of $1.21. The pound could lose further ground the closer Britain comes to a general election.
While a weaker pound would be a boon for foreign buyers looking to snap up British goods on the cheap, it would also drive up local prices and damage U.K. companies that buy and source goods and supplies from outside the country.