Brexit Deal by Morning?

Posted in: MarketsPolitics
Published:
October 15, 2019 10:30 PM UTC

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.

Pound sterling rallies on Brexit progress. | Chart: Yahoo Finance

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.

Josiah Wilmoth edited this article for CCN.com. If you see a breach of our Code of Ethics or Rights and Duties of the Editor or find a factual, spelling, or grammar error, please contact us.

Last modified: October 15, 2019 10:41 PM UTC

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Sam Bourgi @forgeforth87

Financial Editor of CCN.com, Sam Bourgi has spent the past decade focused on economics, markets, and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE, Yahoo Finance, and Forbes. Sam is based in Ontario, Canada and can be contacted at sam.bourgi@ccn.com or at LinkedIn.