UK Brexit chief seeks elusive N.Ireland border solution

Saturday, 03 Nov, 2018

"We are making progress", the official, who spoke on condition of anonymity, told Reuters, adding that the financial services deal would be based on the EU's existing "equivalence" system.

There has been progress towards an agreement giving London's dominant financial centre basic access to European Union markets, two British officials said on Thursday.

But the British parliament will probably reject whatever arrangement Prime Minister Theresa.

Brexit Secretary Dominic Raab set off a flurry of speculation when he appeared to suggest a Brexit agreement could be done within three weeks.

Mr Lidington said he believed they were "very close to resolving" the outstanding issues and he reiterated the UK Government's commitment "to getting over those final difficulties" in the Brexit negotiations as soon as possible.

"I would be happy to give evidence to the committee when a deal is finalized, and now expect Nov 21 to be suitable", he wrote.

UniCredit's Silvestre cautions that it remains unclear whether the United Kingdom government is ready to accept such a proposal, given that the E.U.is still insisting on a "backstop to the backstop" whereby only Northern Ireland would remain in the E.U. customs union (applying the full EU customs code) and the single market for goods. While New York is by some measures bigger, it is more centred on American markets. Brussels rejected her plan to let mainland Britain, too, enjoy special access to the European Union market - but the two sides have since come closer on a possible plan.

The British pound had soared just after midnight GMT following the publication of the Times article and by 08.00 a.m. on Thursday, it traded 1,29 to the dollar, its highest rate in six sessions and a gain of 1.7% over two days.

Equivalence covers a more limited range of business and excludes major activities such as commercial bank lending.

The Bank of England hinted at slightly faster future rises in interest rates if Brexit goes smoothly, but warned all bets were off if next March brought a "disruptive" departure from the EU.

The EU grants foreign financial firms market access if it deems their home rules "equivalent", or aligned closely enough with the bloc's own rules.

The issue has been discussed by the EU's chief negotiator, Michel Barnier, with ministers from the member states.

Barnier said that the equivalence regime, which the European Union has been offering Britain since July, could only ever be unilateral.

However, the Bank admits the economic outlook will "depend significantly on the nature of European Union withdrawal".

The deal offered was bending EU "red lines", which have included refusing to give assurances on future EU-UK trade relations in the Brexit treaty.

The report added to overnight optimism triggered by the UK Brexit Secretary Dominic Raab's letter to the House of Commons Brexit Committee, saying that he expected to finalize a deal with the European Union by November 21, and prompted some aggressive short-covering move around the GBP/USD major.