Brexit: UK ‘absolutely ready’ for no deal scenario says Hancock
Yesterday, the UK offered the EU a compromise on fisheries in a bid to break the current Brexit impasse. It is believed the offer is a 35 percent reduction in the catch value with a five-year phase-in period.
This offer was much closer to the EU’s original demand of a 25 percent reduction.
But the EU has rejected the conceessions on fishing, according to two officials.
With days to the end of a Brexit transition period on December 31, the pound had fallen below $1.32 on Monday as much of the world closed borders to the UK after London identified a highly infectious coronavirus strain.
On Tuesday, the British currency was 0.6 percent lower against the dollar at $1.3385 by 1010 GMT, recovering from a 2.5 percent fall of $1.3190 touched on Monday.
Pound plummets as EU rejects UK concessions
Against the euro, sterling was down 0.4 percent at 91.20 pence, after it fell to as much as 92.16 on Monday.
Jane Foley, head of FX strategy at Rabobank, said: “While a Brexit deal would be a huge move forward, any relief rally in the pound is likely to be tempered by the reality that many sectors will remain outside the reach of any deal and by the concerns over the impact on the economy of the current tier 4 restrictions and border closures.”
The plummeting sterling comes just hours after the FTSE 100 rose 0.2 percent after closing at a three-week low yesterday.
UK markets were battered on Monday as countries around the world shut their borders to Britain due to worries about the new strain.
The pound got a respite after Bloomberg reported that the EU was considering a new proposal on fishing rights from the UK as Prime Minister Boris Johnson tried to secure a last-minute trade deal.
But this hope has been shattered as the EU rejected the deal.
Michel Barnier will update the bloc’s 27 national envoys on the latest on Brexit at 3pm today, with disagreements over fishing rights the key obstacle to a new trade deal, Brussels sources said.
EU officials said Mr Barnier would also speak to the European Parliament’s Brexit group, adding that cutting the value of the bloc’s catch in UK waters by 35 percent from 2021 would be too high.
Fishing rights and quotas have been one of the main reasons why talks have been gridlocked since the UK left the EU back in January.
Mr Johnson has continued to claim the UK would “prosper mightily” if it is a no deal Brexit outcome.
He said: “It’s absolutely vital that our partners understand that the U.K. is going to do what we need to do.
“If we have to have an Australia-style deal, an Australia-style solution, then that is what we will achieve, and we will prosper mightily one way or the other.”
Talks are set to continue this week for two days and a half, ending on Thursday afternoon.
David Frost, the UK’s chief Brexit negotiator, said: “We have scheduled lots of time for discussions, as we should at this point in the talks.
“However, the EU insists we change our position on state aid and fisheries if there are to be substantive textual discussions on anything else.
“We will negotiate constructively but the EU’s stance may, realistically, limit the progress we can make next week.”
French Europe Minister Clement Beaune said the “successive proposals” from the UK on fishing do not respond to EU “priorities and demands”.
He said: “There have been successive proposals from the UK sometimes on fishing, that don’t respond to European priorities and demands.
“Difficulties remain, in the fishing sector – but not only, so it would be an error of judgment and unacceptable stigmatisation to say that a few countries or a few sectors are blocking.”
This is a breaking story. More to follow…