UK accepting most EU demands ahead of Brexit summit

The UK has been forced to agree to most of the demands from the European Union’s Brexit negotiators, according to Vicky Pryce, board member of the CEBR.

United Kingdom and European Union (EU) negotiators meet this weekend to thrash out a Brexit deal ahead of the European Council summit on 22 and 23 March.

Standstill transition expected

A standstill transition is likely, with the transitional period of two years to be cut. It is expected it will now run from when the UK leaves in March 2019 until the end of 2020, rather than the two years initially discussed. It is also expected that EU citizens coming to the UK will have the same rights during that period as now, with Prime Minister Theresa May conceding this point earlier this month. Vicky Pryce, board member of the Centre for Economics and Business Research (CEBR), in conversation with IG’s Jeremy Naylor, said no solution has yet been found that satisfies the EU in relation to the UK’s only land border with the bloc, between Northern Ireland and Ireland.

The transition deal would see pretty much the status quo for the UK, as within the EU, it is part of the single market, the customs union and under the European Court of Justice. It is important to have clarity on the labour front for EU citizens here now or arriving during the transition, Pryce says.

Hard Brexit would be bad news

Jacob Rees-Mogg, a staunch Brexiteer and currently leading the odds as next Conservative Party leader, argues Mrs May should call the EU’s bluff and that a no deal World Trade Organisation (WTO) rules exit is a good alternative. Refuting this, Pryce says 99.9% of economists think that would be very bad news. ‘What you don’t want is trade that is inhibited’, she says, adding that that would completely kill the agricultural section, the manufacturing sector, and there would be no guarantee other countries would reduce their tariffs.

A so-called hard Brexit would be where the UK and EU do not reach a future trade agreement. WTO rules and agreed tariffs would then apply, and Pryce notes that business certainly wishes to stick with the customs union. 

As for the financial sector, the single market is key, as without that there is no passporting. That would require re-approval by each individual EU member state for companies to operate.

Implications for growth once deal done

As to growth, Pryce says, the concerns are the consumer and investment. The consumer has been hit by the Brexit-driven fall in sterling, while wages have not climbed as expected with falling unemployment. In investment, companies need to start investing to meet demand with employment at capacity. The world economy and trade are expanding, particularly in Europe, but ‘we are leaving’. The worry is that by the time the UK does leave in 2021, the global business cycle will be turning down.  

Denne informasjonen er utarbeidet av IG, forretningsnavnet til IG Markets Limited. I tillegg til disclaimeren nedenfor, inneholder ikke denne siden oversikt over kurser, eller tilbud om, eller oppfordring til, en transaksjon i noe finansielt instrument. IG påtar seg intet ansvar for handlinger basert på disse kommentarene og for eventuelle konsekvenser som et resultat av dette. Ingen garanti gis for nøyaktigheten eller fullstendigheten av denne informasjonen. Personer som handler ut i fra denne informasjonen gjør det på egen risiko. Forskning gitt her tar ikke hensyn til spesifikke investeringsmål, finansiell situasjon og behov som angår den enkelte person som mottar dette. Denne informasjonen er ikke utarbeidet i samsvar med regelverket for investeringsanalyser, så derfor er denne informasjonen ansett å være markedsføringsmateriale. Selv om vi ikke er hindret i å handle i forkant av våre anbefalinger, ønsker vi ikke å dra nytte av dem før de blir levert til våre kunder. Se fullstendig disclaimer og kvartalsvis oppsummering.

CFDer er komplekse instrumenter som innebærer stor risiko for raske tap på grunn av giring. 79 % av alle ikke-profesjonelle kunder taper penger på CFDer hos denne leverandøren.
Du burde tenke etter om du forstår hvordan CFDer fungerer og om du har råd til den høye risikoen for å tape penger.
CFDer er komplekse instrumenter som innebærer stor risiko for raske tap på grunn av giring.