Jeremy Vine: Brexit ‘won’t be done’ by deadline says expert
EU and UK negotiators have restarted talks of a post-Brexit trade deal in the hopes of securing a mutual agreement before December 31. It comes after both Europe and Britain confirmed at the weekend there had been enough progress for negotiations to extend past the initial deadline on Sunday. Negotiations will continue in Brussels on Tuesday, but a new deadline for a decision has not yet been set. Without a trade deal in place by the end of the month, Britain and the EU would have to start trading on World Trade Organisation (WTO) terms, meaning taxes and tariffs can be introduced on imports and exports in both directions.
Odds of the UK leaving Europe with no deal currently stand at 2/1, according to Betfair.
Katie Baylis from Betfair explained: “This time last week, despite anonymous sources on both sides briefing that negotiations were in tatters, the odds disagreed – suggesting a deal was still the favoured outcome ahead of PM Boris Johnson’s crunch trip to Brussels, with a ‘no deal’ scenario the outside at 2/1 with Betfair.”
The pound has risen in value in recent days, which adds to the probability of the UK securing a deal before New Year’s Eve.
Pound sterling jumped more than one percent against the dollar on Monday as investors digested claims negotiators are now one step closer to a deal.
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The pound leapt 1.4 percent against a weakening dollar to hit $1.34, before settling later at $1.33 by the time the market closed, reversing some of the losses made last week when investors believed the UK was on course for no deal.
Ms Baylis added: “With the pound surging in value against the Euro and the Dollar, political bettors once again backed Britain to get a deal, meaning the odds of Johnson and his team securing a famous agreement with Europe ended up in favourable territory, with ‘no deal’ back out to 2/1 according to Betfair.
“Following an incredibly eventful week, it now looks a good bet Boris Johnson and Britain secure a deal – with the market suggesting there’s room on both sides to ensure negotiations continue.”
As it stands, the biggest obstacles that stand in the way of a deal remain fishing and fair competition when it comes to business.
Fishing has long been an emotional issue in the UK’s relationship with the EU, and it comes as no surprise that it is one of the last problems to be hashed out before they sign a deal.
Supporters of Brexit see fishing rights as a symbol of the country’s sovereignty that will be regained when the UK leaves, and as sovereignty was one of the principal selling points of Brexit, the Prime Minister likely sees no option but to stick to his guns on the matter.
The British Government says any new agreement on fisheries must be based on the understanding that “British fishing grounds are first and foremost for British boats”.
But the EU wants access for its own boats and says reaching a “fair deal” on fisheries is a pre-condition for a free trade agreement (FTA).
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Ms Baylis said: “With both sides making their red lines clear, the betting suggested one of the remaining hurdles – fishing rights – wouldn’t prevent a deal being done and as Johnson travelled to the Belgian capital, the odds of the talks failing were cut fractionally to 7/4, but remained steady all day and crucially in favour of Britain securing a deal.
“In what must have been an eventful dinner with European Commission President Ursula von der Leyen, the odds dramatically swung in favour of no deal at 4/5, making it odds-on, or more likely than not, to be the outcome for the first time in the week.
“However, within a minute and presumably when both sides had left the dining table, news filtered through of ‘frank’ and ‘lively’ talks which crucially materialised as market confidence in a deal being done, meaning Johnson returned to London where he left having salvaged his position in the betting just before the clock struck midnight.”
As political betters digested the Brussels dinner deadlock, bets saw further support for a no-deal outcome, with odds on December 10 falling from 5/4 to evens, according to Betfair.
In the days after the Prime Minister’s visit to Brussels, punters saw his tone become more and more pessimistic as he warned of an Australia-style trade deal and said no-deal looked to be the likeliest scenario.
Ms Baylis added: “As a result, Betfair made no deal odds-on, hitting a low point of just 1/2 as Johnson appeared to have run out of time ahead of the initial Sunday night deadline.
“However, in a remarkable 12 hour period in the betting, the UK’s position began to improve significantly on Sunday as the EU and UK agreed to stay at the negotiating table, triggering a surge of bets for a deal with saw the odds of ‘no deal’ lengthen from 1/2 to 11/10.”
The good news for bettors is that it won’t be long to wait before a deal or no-deal scenario is clarified as the two sides reach the end of the transition period in just over two weeks.
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