Sterling and Brexit are at the forefront of market news yet again today as cable pushed back higher after a disappointing session on Tuesday. Overnight the headline broke that the UK is close to a deal with EU, on what seems like the UK government completely backing down on its previous stance. Previously Theresa May had said that the UK would not be held to ransom over the Brexit bill, however today’s stance almost gives into the thought that the negotiations over other aspects of Brexit may not be advanced until the bill had been finalised.
Today’s headlines seem to be hinting at a headline Brexit bill of around 55bn euros, however the figures are of course much more complicated than just one headline number, and it is expected that total liabilities could well topple the 100bn euro mark. It’s a good job the Chancellor put aside GBP3bn in the budget last week! We must remember here that negotiations are still ongoing and that this deal only covers the financials.
We have had no confirmation of any of these headlines from the government but expectations are that we will get confirmation in the next 24 hours. This does have the feeling of being a complete give up from the government despite such strong rhetoric previously. The suggestion was always that the UK would not be held to ransom, but it seems that negotiations could not carry on with a bill formalised. It also shows us that the EU cares not for any UK position or stance over the key sticking points and is very much happy to play hard ball.