Markets on edge as Brexit uncertainty hits new highs

LONDON (AP) — It's crunch time for Brexit, and investors will be on high alert in the run-up to Christmas.

British lawmakers are set to vote Tuesday on Prime Minister Theresa May's Brexit deal with the European Union. All indications are that she will suffer a major defeat, opening up a dizzying array of consequences that could increase volatility in global financial markets, especially for the British pound.

Defeat of May's deal could suggest that Britain is one step closer to dropping out of the EU in March with no deal, a worst case scenario that most economic commentators, including the Bank of England, say would lead to a savage recession.

But it could also lead to scenarios under which the country remains close to — or even stays in — the EU.