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.
Sterling, meanwhile, traded over 1% higher against the dollar at 1.35 and the FTSE 100 ended the day up 0.7%. 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.
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.