Brussels and Downing Street have played down speculation about a breakthrough in Brexit talks.
Reports that a Brexit deal could safeguard the City’s access to European Union markets led to an increase in the value of sterling. But Number 10 said it was speculation and talks were ongoing, while the EU’s Brexit negotiator Michel Barnier hit out at “misleading” accounts.
A report in The Times suggested a tentative deal had been reached on all aspects of a future partnership on services and the exchange of data. Such a deal would guarantee UK companies access to EU markets as long as domestic regulations remained broadly aligned with those set by Brussels.
Sterling went up nearly 1% versus the dollar overnight at 1.28 US dollars. But the Prime Minister’s official spokesman said: “It’s time for everybody to draw a deep breath. “This is speculation. While we continue to make good progress, agreeing new arrangements for financial services negotiations are ongoing.”
In March, Philip Hammond warned the EU’s existing regulatory equivalence regime was “wholly inadequate for the scale and complexity of UK-EU financial services trade”, in part because it allows Brussels to unilaterally end the relationship with little or no notice.
The blueprint reported in The Times would appear to address some of those concerns, with neither side able to unilaterally declare regulations have fallen out of equivalence and block access to their markets without first going through independent arbitration and providing a notice period significantly longer than the current 30 days.
But Mr Barnier said there had been “misleading press articles today on Brexit and financial services”.
He added: “Reminder: EU may grant and withdraw equivalence in some financial services autonomously. “As with other third countries, EU ready to have close regulatory dialogue with UK in full respect for autonomy of both parties.”
There was confusion in Westminster over how close an overall Brexit deal may be after Dominic Raab hinted a deal could be done within weeks. Mr Raab was accused of a “messy U-turn” after he indicated he expected an EU withdrawal deal finalised by November 21, only for his department to later insist there was no set date.
In a letter to the House of Commons Exiting the EU Committee, Mr Raab wrote:
“I would be happy to give evidence to the committee when a deal is finished and currently expect November 21 to be suitable.” But, after the letter became public, the Department for Exiting the European Union said “there is no set date for the negotiations to conclude” and November 21 “was the date offered by the chair of the select committee for the Secretary of State to give evidence”.
Shadow Brexit secretary Sir Keir Starmer was scathing, saying: “What a mess.”
Downing Street would not be drawn on the date, with a spokesman for Prime Minister Theresa May stating: “We want to get a deal as soon as possible and that’s what we’re working to achieve.”