The United Kingdom’s arduous exit from the European Union (EU) could be finalized as soon as Wednesday morning, The Wall Street Journal reported Tuesday.
Brexit Deal Coming?
Citing people familiar with the matter, WSJ reported that negotiators from the UK and EU are finalizing a draft Brexit bill that could pave the way for Britain’s eventual withdrawal from the bloc. The text needs to be submitted by midnight for Michel Barnier, the EU’s chief negotiator, to recommend sign off the following morning.
Leaders from the EU are scheduled to meet later this week and their approval is required for Britain to proceed to the next step.
At the time of writing, there was no deal in place and sources told WSJ there could be political or technical setbacks at the last minute. Meanwhile, British Prime Minister Boris Johnson is said to be meeting Conservative Brexiteers in London.
Before WSJ reported on the breakthrough, evidence was emerging that both sides were inching closer to an agreement. Even Leo Varadkar, Ireland’s Prime Minister, told reporters that “the negotiations are moving in the right direction.”
Negotiations gathered pace over the weekend after British government made new proposals in relation to several contentious issues, including the status of Ireland’s border post-Brexit.
Johnson’s Tory government has given a hard deadline of Oct. 31 to exit the EU. The U.K. plans to leave with or without an agreement.
British Pound Surges
Optimism surrounding a final Brexit agreement sent the British pound soaring on Tuesday. The pound-dollar exchange rate, better known as cable in the foreign exchange world, surged to a high near 1.2800. The currency pair was last up 1.1% at 1.2766.
The pound has suffered irreversible damage since June 2016 when the United Kingdom voted to leave the European Union in a referendum outcome that shocked the world. Sterling immediately fell to 31-year lows post-referendum and would go on to test new multi-decade lows through 2019.
Brexit uncertainty has pushed the British economy closer to recession, as evidenced by the latest round of GDP figures. Gross domestic product (GDP) slumped 0.2% in the second quarter, making Britain one of Europe’s worst-performing economies.