Officials on both sides have said they are optimistic about the chances of a deal, but some issues remains. Reuters, citing an anonymous source, reported that a trade deal was “imminent,” although CNBC could not independently verify this.
It comes after EU Chief Brexit Negotiator Michel Barnier said Tuesday that the bloc was making a “final push” to strike a Brexit trade deal with Britain ahead of Dec. 31.
“We are really in a crucial moment,” Barnier told reporters on his way to brief 27 ambassadors. “We are giving it a final push. In 10 days, the U.K. … will leave the single market.”
The yields on U.K. and U.S. government bonds rose late afternoon London time Wednesday on hopes of a deal. The U.K. 10-year yield rose by 11 basis points to 0.302% — its biggest rise in six weeks — while U.S. 10-year yield jumped 5 basis points to trade around 0.9646%. Bond yields move inversely to prices.
Britain’s Prime Minister Boris Johnson (L) is welcomed by European Commission President Ursula von der Leyen (R) in the Berlaymont building at the EU headquarters in Brussels on December 9, 2020.
OLIVIER HOSLET | AFP | Getty Images
U.K. Prime Minister Boris Johnson and European Commission President Ursula von der Leyen have embarked on a series of “hotline” talks, the FT reported Wednesday, in an attempt to agree on a deal before the end of the day.
However, there are still disagreements over fishing rights, and several other issues.
The EU wants to maintain access to U.K. waters for its fishing fleets, while the U.K. wants to largely curb these fishing rights. A no-deal scenario could see EU access to U.K. waters end abruptly, and vice versa, and the U.K. has already threatened to deploy gunboats to protect British waters.
There are concerns that some fishing fleets could ignore any restrictions, leading to potential clashes. These are not unheard of; there have been physical skirmishes, dubbed the “Scallop wars,” between British and French fishing fleets in recent years amid disputes over fishing.
U.K. Housing Secretary Robert Jenrick told Sky News on Wednesday that “serious areas of disagreement” remained, on both fisheries and creating a “level playing field” for businesses.
“I’m still reasonably optimistic but there’s no news to report to you this morning,” he said. “”At the moment there isn’t sufficient progress. It isn’t a deal that the prime minister feels he can sign us up to.”
There have, however, been positive reports regarding the Brexit talks in the last 24 hours, with ITV’s Political Editor Robert Peston claiming on Tuesday that a deal could be reached on Wednesday.
If Britain and the EU fail to agree on a deal by Dec. 31 then both sides could impose border checks and import taxes on each other’s goods, as trade will revert to World Trade Organization terms. This could lead to price changes in supermarkets and shops.
Britain officially left the European Union on Jan 31., 2020, however leaders were given 11 months to agree on the rules that will dictate life for the U.K. and Europe after Brexit.
— CNBC’s Holly Ellyatt contributed to this article.