UPDATE - UK court tells gov't to consult parliament on Brexit

REWRITTEN THROUGHOUT WITH STERLING MOVEMENTS, ECONOMY NEWS

LONDON (AA) – Britain’s government cannot unilaterally take the country out of the European Union and must allow lawmakers to vote on the matter, judges have ruled in a landmark case.

The High Court ruled on Thursday morning that the U.K. parliament must be consulted before the country can trigger Article 50, the formal mechanism for leaving the European Union.

Ministers had said the results of June’s referendum on EU membership, in which voters opted to leave by a 52-48 percent margin, should be respected.

But judges said lawmakers cannot by bypassed in overturning the original 1972 law that took Britain into the European Communities, a precursor to the EU.

Pound sterling jumped to $1.2485 in response to the ruling, its highest level since the beginning of October.

Separately, the Bank of England -- the U.K.’s central bank -- raised its economic outlook for the country and kept interest rates at a record low of 0.25 percent.

But in an announcement on Thursday afternoon members of the bank’s Monetary Policy Committee warned pound sterling’s dramatic loss in value since the Brexit referendum will cause inflation to soar in the country.

It forecast prices will rise by as much as 2.7 percent in 2017, nearly three times its current level.

An appeal against the High Court ruling will be heard at the U.K. Supreme Court on Dec. 7.

International Trade Secretary Liam Fox said the government was “disappointed” by the result.

He told parliament: “The country voted to leave the European Union in a referendum approved by an Act of Parliament. And the government is determined to respect the result of the referendum.”

But the text of the judges’ decision read: “The most fundamental rule of the U.K.’s constitution is that Parliament is sovereign and can make and unmake any law it chooses.

“The government of the day cannot override legislation enacted by parliament without a fresh vote,” they added.