Then there is the delicate issue of internal market accounting. The House of Lords voted overwhelmingly in favour of repealing the controversial clauses of the law that effectively give the government the power to repeal parts of the withdrawal agreement. For now, the government has indicated that it will fight to reinstate these clauses when the bill returns to the House of Commons, and has already indicated that it will introduce another legislation (the Finance Act) that may contain other incendiary kits. Mrs May has reached a withdrawal deal with the EU – the so-called “divorce” deal – but British MPs have rejected the deal three times. Mr Johnson wants to remove the Irish backstop from the deal, but the EU has systematically ruled it out and said it will not renegotiate the deal. Longer smarket rates are in line with other observers` forecasts. Jordan Rochester, a money strategist at Nomura, said this week that the chances of a no-deal Brexit had risen to 40%. Finally, as we look at the issue of `optimistic` developments, it is worth pointing out overnight a story by the Irish channel RTE, which suggests that the EU is considering a proposal to give supermarkets a first break from paper work for crossings between the UK and Northern Ireland. The report, which calls it a “temporary adjustment period,” could raise hopes that a free trade agreement would be relatively simple in itself, but could be accompanied by a broader package of measures to cushion the first blow to businesses.
Finally, the damage that Brexit will cause to the UK economy next year will largely depend on the extent of the initial disruption. Progress has been made on issues such as repression, transport and social security, but a source told Politico`s London Playbook that if Brussels continued to call for free access to BRITISH waters and continuity of fishing quotas, it would not be possible to reach an agreement on trade after Brexit. Discussions on a free trade agreement, which is hoped to eliminate almost all tariffs and minimize other trade barriers, will continue. “And they don`t seem to have understood the magnitude of the change in fishing rights they face if there is no agreement.” Time is running out for negotiations between Britain and the EU, although we continue to believe that the chances of reaching an agreement are accumulated. But nothing is guaranteed and, as we have learned throughout the Brexit process, there is still room for unexpected surprises Paris Exchange Smarkets says that the chances of a trade deal between Britain and the EU have dropped by 18% by the end of this year, and have reached almost 50-50. Whether true or not, it is important because many Eurosceptic Conservative MPs are unlikely to accept the compromises the government has to make. This does not necessarily mean that the agreement will have difficulty going through Parliament – after all, unlike this time, the government has the gift of a large majority. But in light of the latest polls and the perceived attitude towards Covid-19, further differences of opinion on Brexit within the Conservative party could end up obscuring another cloud over Johnson`s future as party leader.