Brexit Trade Deal Doubts Causing No Deal Odds To Wobble

Brexit Trade Deal Doubts Causing No Deal Odds To Wobble
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Experts don't expect Boris Johnson to back down on the No Deal threat

Brexit is back on the agenda as concerns loom over a trade deal between the UK and the EU actually being signed off this summer.

As MPs go on their summer holidays, the UK government’s Brexit negotiation team is entrenched in talks with its EU counterparts.

And a swing in the Brexit odds in political betting markets have indicated the growing uncertainty that No Deal is still very much a possibility.

The UK officially left the European Union at the end of January and has since been discussing a trade deal with the bloc.

Prime Minister Boris Johnson set a deadline of July 31 to get the deal agreed, in order to keep five months in the bank for ratifying the terms and putting it into law before the end of the year.

But the UK faces a desperate struggle to meet Johnson’s summer deadline as negotiations drag on.

Brexit Odds Reveal Concerns

And there are growing concerns that failure to secure an agreement by the PM’s deadline will lead to No Deal and see the UK default onto World Trade Organisation rules.

The Brexit odds on a Deal being signed in 2020 are slowly widening as uncertainty creeps into the market, with the price currently rising at 7/12.

Meanwhile, UK bookmakers have seen their No Deal odds shrink from 9/7 to 11/10 within 48 hours.

No Appetite For Transition Extension

Whether or not failure to agree a deal would see the transition period extended beyond January 1, 2021 remains to be seen. But it appears as though there is little appetite for this outcome.

After all, 2021 will signify five years since the UK voted for Brexit – and Johnson won the 2019 election on a ticket that he would ‘get Brexit done’.

He has often held firm on the notion that No Deal will happen if a full trade arrangement with the EU cannot be ratified.

And the odds on a Brexit extension into next year have widened out to 11/15, suggesting bookmakers and UK politics betting experts aren’t expecting Johnson to back down on the No Deal threat.

Brexit Negotiation Sticking Points

There are some major issues the UK and EU need to iron out before they come to an agreement – but it could still happen this summer.

One is fisheries and how the UK will control its fishing territories once Brexit is complete. The other disagreement is on standards, and how to ensure neither party undercuts the other on regulatory standards or introduces unfair industry subsidies.

Fisheries is particularly important because eight EU member states have insisted they will not agree to a deal without a deal on this industry in place. All members of the EU must agree to any deal negotiated, which makes discussions such as these very tricky.

As for Johnson, he could well feel the heat further into the autumn if a default onto WTO terms looks likely.

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