Value Of Pound Increases As Michel Barnier Unveils Plans To Offer UK A Third Country Deal

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This afternoon, the value of the pound rose after Michel Barnier, the chief negotiator of the EU, seemed to offer a breakthrough on Brexit. He told reporters that the UK would be receiving an unprecedented deal for a third country.

Sterling rose by more than one percent higher after the news was revealed. It broke the $1.30 mark for the first time in three weeks. Meanwhile, the yield on the 10-year government bonds of the UK increased by five basis points to 1.51 percent.

The pound also increased by 0.97 percent against the euro, at €1.1116.

Barnier stated: “We are prepared to offer Britain a partnership such as there has never been with any other third country.” He was talking to reporters in Berlin on Wednesday following a meeting with Heiko Maas, the German foreign minister.

He disclosed that the deal could include economic as well as foreign and security policy ties.

However, Barnier reemphasised his ruling out of any cherry picking.

He stated: “We respect Britain’s red lines scrupulously. In return, they must respect what we are.”

He added: “Single market means single market … There is no single market a la carte.”

The comments of Barnier came after an article released by Bloomberg implied that officials on both sides were no longer expecting that the European Council to result in a significant breakthrough in the talks this October. It says that they are instead looking to the emergency November summit that is being shoe-horned in as a more possible date.

Dominic Raab, the UK Brexit secretary, will travel to Brussels on Thursday to attend a meeting with Barnier on Friday. This afternoon, he appeared before the Lords’ European Union select committee. He reiterated the view of the government that a deal was still possible.

He informed his peers that member states had been greeting the Brexit white paper of the UK that was based on the Chequers agreement as “an interesting set of substantive proposals.” He said that it had “a reasonably constructive landing.”

However, he noted that it had not been without compromises being made in Westminster. He pointed to the resignation of David Davis, his predecessor. He emphasised that “some of that pragmatism needs to be matched on the other side.”

Raab reaffirmed the commitment of the UK government to the Irish backstop, despite admitting that no solution had yet been determined.

Raab also seemed to confirm that October was no longer regarded as the deadline for a deal. He told the Lords of “the possibility it may creep over that” month.

He added: “I am aiming, we are aiming, for the October Council – but there is some measure of leeway.”