The European Union is to start legal proceedings against the UK over "plans to break international law".
The legal action - so far represented only by a 'Letter of Formal Notice' from the European Commission - is of little consequence in itself, but is a necessary first step in legal proceedings through the European Court of Justice. The EU has given the UK one month to reply.
The legal action is in response to the UK government's plans to enact a Bill (The Internal Market Bill) that would potentially allows the UK government to act in contravention to the Withdrawal Agreement if doing so would be in the best interests of the UK.
The purpose of the Internal Market Bill is to protect the integrity of the UK internal market in case the UK and EU do not come to an agreement on trade, in particular trade between the EU and Northern Ireland and between Northern Ireland and the rest of the UK.
Critics of the government's plan argue that the Bill is a violation of international law. However, this is clearly not the case. The Bill itself contravenes nothing, rather it gives the UK government the power to act and, potentially, to violate the Withdrawal Agreement, if doing so was in the interests of the UK. Such a situation may arise if there is no agreement between the UK and EU on trade. In other words, the Bill prevents the UK being held to ransom by the EU.
The pound fell 0.7% against the dollar on the news, this in response to the escalation in tension between the UK and EU that the EU's latest move represents.