The pound jumps after the European Union negotiator on Brexit said a trade deal is within reach

BRUSSELS, BELGIUM – February 3: The chief EU negotiator on Brexit, Michel Barnier, speaks during a press conference in Brussels, Belgium on February 3, 2020.

Anadolu Agency

Sterling pound It jumped more than 0.8% versus U.S. dollar On Wednesday, after the European Union indicated that a trade deal with the United Kingdom was still possible.

“Despite the difficulties we have faced, an agreement is within reach if both sides are willing to work constructively, if both sides are willing to make concessions and if we can make progress in the next few days on the basis of legal texts,” said Michel Barnier. The chief negotiator of the European Union before the European Parliament “If we are ready over the next few days to solve the sticking points, the most difficult issues will be”.

His comment gave traders some optimism that a trade deal between the UK and the EU would be reached nonetheless Their negotiations have stalled On the same three cases for months.

On Friday, the Prime Minister of the United Kingdom Boris Johnson Dark tone when warning exporters to prepare for a disagreement with the European Union. A government spokesman went further the same day, saying that European negotiators did not need to travel to London this week if the European Union did not change its approach to talks.

British officials were disappointed late last week when European leaders called on the UK to “take the necessary steps to make the agreement possible”.

These tensions halted negotiations, but the European Union has now said it is ready to return to the negotiating table once the UK government chooses to do so as well.

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Look for necessary adjustments

“We will seek the necessary compromises from both sides in order to do our best to reach an agreement, and we will do so until the last day when it can be done,” Barnier told lawmakers on Wednesday.

“Our doors will always remain open until the end, but we will remain steadfast,” he added.

The UK suspended its EU membership in January but follows EU rules until the end of the year so that both sides can work on new trade arrangements. These will be different from the zero-tariff system in place today. Failure to develop new trade rules will mean that exporters will face higher costs and barriers when selling goods between the two blocks.

British Government Minister Michael Gove told Sky News on Sunday that there is less than a 50% chance of a deal being reached. Earlier this month, he had identified it with a probability of 66%. Negotiators have yet to reach compromises over fisheries, competition rules, and future oversight of their potential deals.

In addition, the European Union has said it will not sign any new trade agreement while the UK government is not fully complying with the Withdrawal Agreement, which they signed earlier this year that paved the way for the UK’s withdrawal from the bloc. The government in London has introduced a bill that goes beyond parts of these previous agreements and demanded that the European Union correct the upcoming legislation to respect their previous agreement.

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