GBP was under pressure during Friday trade, as Brexit Negotiators Barnier and Frost revealed that very little progress had again been made at negotiations.
Around midday, UK Brexit Negotiator Frost released a statement which said that very little progress was made and that a major obstacle was the EU’s insistence on including a set of “novel and unbalanced” proposals on the so-called “level playing field”.
"It is hard to understand why the EU insists on an ideological approach which makes it more difficult to reach a mutually beneficial agreement", Frost said.
The UK has also today reiterated that it would not ask for or accept an extension to the transition period (despite rampant speculation that they will do so before the end of June deadline to agree one).
EU Brexit Negotiator Barnier said that if the UK refuses to engage in full conversation on the level-playing field, no progress will be made on other areas. Moreover, there will be no deal without an agreement on fisheries, he added.
As a reminder, the effective deadline for an extension to the transition period to be agreed is the 29th of June. If an extension is not agreed by then, the chances of a no-deal end to the transition period at the end of the year will be very high (which would crush GBP).
Given how the EU typically operates, with breakthroughs in negotiations only coming in the 11th hour, we expect little progress in UK/EU talks until right towards the end of June, if we get any progress at all.
Until then, GBP looks likely to remain vulnerable to ongoing concerns regarding a potential no deal at the end of the year.
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