British prime minister Theresa May has promised parliamentarians a vote on whether to leave the EU without a deal or to delay the UK’s departure date, if her Brexit withdrawal agreement is rejected in a crunch vote next month.
Sterling jumped to a 21-month high to $1.3203 as the government shifted for the first time in months.
Mrs May is trying to stave off a potential revolt by some of her Remain-supporting ministers, who have threatened to resign unless she rules out Britain crashing out of the world’s largest trading bloc without a deal.
Speaking in the House of Commons on Tuesday, the prime minister repeated a pledge she made last weekend to allow a parliamentary vote on her divorce deal on March 12.
If the deal is rejected, as it was in January in the biggest defeat for a sitting UK government in history, then MPs will be asked to vote on whether to leave the EU without a deal the next day.
Mrs May told parliament: "Let me be clear, I do not want to see Article 50 extended. Our absolute focus should be on working to get a deal and leaving on March 29."
"I believe that, if we have to, we will ultimately make a success of no deal," she added.
The shift in policy followed public letters from ministers urging Mrs May to take no deal off the table in recent days.
The rebellious ministers had threatened to back an amendment this week which would force the prime minister to delay Brexit if she was unable to get changes to her withdrawal agreement from Brussels.
Mrs May held talks with EU leaders over the weekend in Egypt but was unable to achieve a breakthrough on the contentious issue of the backstop, an insurance policy to avoid a hard border in Ireland.
On Monday night, opposition leader Jeremy Corbyn shifted Labour’s stance saying he would back a second referendum if his party’s plans for Brexit are defeated in parliament on Wednesday.
Mr Corbyn said on Tuesday that if Mrs May's deal "somehow does pass in some form at a later stage, we believe there must be a confirmatory public vote to see if people feel that's what they voted for".
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