This week we had an announcement that Britain and Germany had agreed to drop specific sticking points around the shape of our future relationship with the EU, which was perceived to make an exit deal more likely. While the pound did strengthen on the news, reports of a surge were overblown as it remained far from its six-month high against the dollar. The positive sentiment has also been undermined by both the Conservative back benches and EU negotiators, who have decided to call time on Theresa May’s Chequers proposal, albeit for very different reasons.
It is a reminder that there are actually two sets of negotiations going on. First and most pressing is a withdrawal agreement; this sets out what happens on exit day and what the transition period thereafter looks like. Then there is the future terms agreement, which sets out our new long-term relationship with the EU as an ex-member. Getting a favourable withdrawal agreement means that while a hard Brexit is still possible, it is at least delayed. That a decision not to talk about the details of the future relationship is viewed as a positive development gives you a good indication of how things are going.
Read what the team at FE consider to be significant over the current week.