Pound Sterling Comes off the Boil after Brexit Trade Talks End a Day Early, Advances against Euro and Dollar Fade
Above: File image of Michel barnier © European Union / Source: EC - Audiovisual Service / Photo: Mauro Bottaro
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The first round of 'intensified' Brexit trade negotiation talks unexpectedly concluded a day early amidst confirmation the two sides remain deadlocked, a development that conicides with a move lower in the value of Pound Sterling.
"The negotiations have been comprehensive and useful. But they have also underlined the significant differences that still remain between us on a number of important issues," said the UK's lead negotiator David Frost in a statement following the latest round of EU-UK trade negotiations that concluded on Thursday.
Talks were only scheduled to conclude on Friday.
The EU's Chief Brexit negotiator Michel Barnier said in a statement that little has been achieved.
"After four days of discussions, serious divergences remain," said Barnier.
The three points of contention centre around the UK's refusal to agree on the EU's demands regarding the following:
1) level playing field provisions
2) EU fishing rights in UK waters
3) Dispute settlement mechanisms
The Pound had been engaged in something of a recovery until the developments on the Brexit front, confirming that this issue remains a primary concern for markets. The Pound-to-Euro exchange rate is quoted at 1.1084 having been as high as 1.1102 earlier, while the Pound-to-Dollar exchange rate is at 1.2484, having been as high as 1.2529 earlier.
The next round of negotiations in the week of 20 July but negotiators while discussions will continue in London next week.
Nick Gutteridge, an independent Brussels reporter who we find invaluable in covering this saga, has some decent insights into the latest developments, saying "people will justifiably interpret these statements in a gloomy light. But they're anodyne, brief, and both sides are being achingly polite. There will be no podium bashing this week - a departure from the briefing skirmishes of recent months. Read into that: It's getting serious."
"We remain committed to working hard to find an early understanding on the principles underlying an agreement out of the intensified talks process during July, as agreed at the HLM on 15 June," added Frost in a brief statement.
Guterridge says Frost's statement is interesting "given the UK side has been very proactive comms-wise. It's the bare minimum and strikes a different tone to his tweets just a week ago. He also talks of face to face talks giving extra 'flexibility' - a word Barnier has been using a lot lately".
Jim Brunsden, a Brussels correspondent for the FT says Barnier's was a carefully weighted statement that nevertheless offers "some clear signs that the EU has been thinking about how to accommodate UK red lines".
In particular, Brunsden references the following passage from Barnier's statement:
"The EU side had listened carefully to UK Prime Minister Boris Johnson's statements in recent weeks, in particular, his request to reach a political agreement quickly, and his red lines: no role for the European Court of Justice in the UK; no obligation for the UK to continue to be bound by EU law; and an agreement on fisheries that shows Brexit makes a real difference."
