Published: Sun, September 02, 2018
Markets | By Otis Pena

Barnier increases pressure on United Kingdom over Brexit backstop

Barnier increases pressure on United Kingdom over Brexit backstop

Giving credibility to the notion that the recent fears of a "no deal" - which has put the Pound under notable pressure - were overblown is an assessment by lead UK Brexit negotiator Dominic Raab that the finalisation of an initial deal was 80% complete.

U.K. stocks fell in cautious trade on Friday as U.S. President Donald Trump threatened to escalate his trade war with China and investors awaited the outcome of Brexit talks between European Union negotiator Michel Barnier and U.K. Brexit Secretary Dominic Raab.

"We are committed to resolving a deal by the October council summit", Raab said.

"This backstop is critical".

He said: "We must remember beyond Brussels and the Westminster village, that actually there are real people affected by the trade negotiations".

The backstop is a safety net agreed in December that guarantees an invisible border, though there is no agreement to this date on how it will work. "In return, they must respect what we are", he said.

In fact, according to Viraj Patel, Foreign Exchange Strategist at ING, most analysts thought such a close deal was unlikely to be possible, saying: "This is something that most hadn't thought was possible and may trigger a partial reassessment of no-deal Brexit risks that lends support to a politically-infested pound".

Panasonic plans United Kingdom office relocation before Brexit
It comes as several other Japanese financial companies say they intend to move their main European Union bases away from London. Several multinational corporations have confirmed plans to move their operations out of the United Kingdom ahead of March 2019.

"I've asked Dominic and his team to give us a certain amount of data which is necessary: where and how the necessary controls take place".

The EU and UK's chief Brexit negotiators vowed on Tuesday (21 August) to step up talks in the coming weeks in a bid to avoid the United Kingdom crashing out of the bloc without agreement next March.

"With no backstop, we will not be able to have an agreement".

The pound hit a one-week high against the euro, extending overnight gains and heading for its biggest two-day rise since November after the bloc's chief negotiator said day it was ready to offer Britain an unprecedentedly close relationship after it quits.

The Irish border is the most pressing of issues still left to be tied up.

Talks are ongoing, with the subject of Brexit likely to be a particular talking point at a n informal meeting of European Union leaders in Salzburg on September 20.

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