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About UK Risk

21 August 2020 by jbchevrel

The outcome of the week in discussions between UK/EU was not satisfactory for EU’s Brexit negotiator Barnier. He has warned that valuable time is being wasted in trade talks with the UK as he accused his British counterparts of failing to offer solutions on topics of key interest to Europe during the latest round of trade negotiations. Barnier reiterated that at this stage an agreement between the two sides still looks unlikely. The UK’s chief negotiator Frost acknowledged that there had been “little progress” this week, but he insisted that a deal remained possible although not easy to achieve. The sticky points he mentioned are still the same (fishing + state aid): “The EU is still insisting not only that we must accept continuity with EU state aid and fisheries policy, but also that this must be agreed before any further substantive work can be done in any other area of the negotiation, including on legal texts”. One can imagine a renewed under-perfomance of UK assets/CDS compared to € assets/CDS in the coming months, as, additionally, economic data will shed some light on Q3 in both regions. If the adjusted number of new COVID cases is now higher in the €zone than in the UK, some lockdowns are being tightened in parts of north-west England that are experiencing a spike in infections. Residents of Oldham, Blackburn and parts of Pendle will not be allowed to socialise, either indoors or outdoors, from midnight on Saturday.