Brexit Bulletin, 5 November 2018

Nov 05, 2018

Following a quiet period on the negotiation front for the past two weeks, media reports over the weekend that a Brexit deal has been done were quickly rejected by official sources.  In other news, the EU has warned that they will decide what rights UK financial services firms will have to operate in the EU after Brexit and there are warnings of interest rate fluctuation in the UK depending on the Brexit outcome.

All quiet on the Brexit front

Things seem to have quietened down in terms of Brexit negotiations in the past couple of weeks.  Both sides want to get to a situation where the EU can call a November summit to sign off on a Brexit deal.  However it seems that a solution to avoiding a hard border on the island of Ireland remains outstanding.

Last week there were some reports that the EU have tentatively agreed to include a temporary arrangement in the Withdrawal Agreement whereby the EU and the whole of the UK could remain in a customs union.  This version of the backstop would stay in place until a better or more permanent deal is reached.

With only 144 days to go until Brexit day, and with talks resuming today between both sides, the next week will prove crucial in deciding whether an EU summit will be called later this month.

No deal yet on financial services?

The EU’s chief negotiator Michel Barnier responded to media reports that a deal had been reached between the EU and the UK on giving the UK access to the EU’s financial services market after Brexit.  Mr Barnier said the reporting was “misleading” and issued a reminder that it would be up to the EU whether to recognise the UK’s financial services as equivalent.  Equivalence would make it easier for non-EU companies to operate in the EU’s Single Market but is generally not as generous as having full passporting rights; which the UK currently enjoys as part of the EU.

Interest rates

The Bank of England Governor Mark Carney has suggested that if Brexit goes smoothly, faster rises in interest rates could be expected.  However in the event of a disruptive Brexit, the Bank was unsure whether rates would need to rise or fall in response.

Lunchtime webinar: Brexit & Customs: 7 November 13:00 – 14:00

Are you involved in trade with the UK?  If so, regardless of a hard or soft Brexit outcome, you will need to know how to file customs returns and declarations once the UK leaves the EU.  During this 1 hour webinar, Carol Lynch, Partner in BDO’s Customs and International Trade Services division will talk you through customs compliance and border requirements, trading under World Trade Organisation rules and free trade agreements, as well as the declarations that are required to be lodged with customs under various scenarios.

To register for this CPD event use this link.

Read all of our Brexit updates and Back to Brexit Basics on the dedicated Brexit section of our website.