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Brexit Bulletin: Johnson prepares for no-deal

Brexit Bulletin

What's happening? The British prime minister says it's time to get ready for a no-deal split from the European Union.

Boris Johnson was not impressed by the conclusions of Thursday's EU leaders' summit, which called on the U.K. to compromise in the search for a trade deal with the bloc.

EU leaders "have abandoned the idea" of an agreement, Johnson said on Friday, blaming them for refusing to offer good enough terms.

Boris Johnson on Oct. 16.

Without what he described as a "fundamental change of approach" from Brussels, Johnson said the U.K. will now leave the EU's single market and customs union without a new agreement in place and he's stepping up preparations for that outcome.

Read More: The Canada, Australia Models for Post-Brexit Trade

It sounds like very bad news for those on both sides of the divide who hope for a deal to ensure less friction in doing business between Britain and its largest trading partner. Adam Marshall, director general of the British Chambers of Commerce, said statements from both sides were "unhelpful" and called for "less posturing and briefing, and more negotiation, please." Ian Wright, chief executive of the Food and Drink Federation, said "we are heading into dangerous territory."

That may be the case. But Johnson pointedly did not walk away from talks, even when asked directly, twice, by an ITV News reporter. European Commission President Ursula von der Leyen responded quickly, saying negotiators would go to London next week to "intensify" talks — the same word removed from summit conclusions one day earlier, much to the U.K.'s dismay.

The sticking points are the same as they always have been: level playing field requirements from the EU and, most notably this week, an impasse over fishing rights. Each side wants concessions from the other, and right now neither is prepared to make anything that looks like the first move. Speaking in Brussels on Friday, French President Emmanuel Macron blamed the British for wasting time earlier in the talks with tactical maneuvering.

The pound swung on Friday's news, gaining before Johnson spoke then falling when he did, before paring losses to trade at $1.2909 at 1 p.m. in London.

As we reported earlier this week, a close reading of sterling's ups and downs over the past four-and-a-half years suggests that a deal might well be struck, in the end.

With time running out, this week's bouts of brinkmanship may well be the last.

Adam Blenford

Beyond Brexit

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