Boris Johnson and EU's Von der Leyen set for crunch Brexit talks

Oscar Williams-Grut
·Senior City Correspondent, Yahoo Finance UK
·3-min read
British Prime Minister Boris Johnson leaves Downing Street in central London to attend Cabinet meeting temporarily held at the Foreign Office to comply with social distancing guidelines due to the ongoing coronavirus pandemic, on 30 September, 2020 in London, England. (Photo by WIktor Szymanowicz/NurPhoto via Getty Images)
British prime minister Boris Johnson leaving Downing Street in London, on 30 September. Photo: WIktor Szymanowicz/NurPhoto via Getty Images

The pound jumped on Friday, after Downing Street said UK prime minister Boris Johnson would step in to direct Brexit trade talks for the first time in months.

A spokesman for the prime minister said Johnson would speak with European Commission president Ursula von der Leyen on Saturday to “take stock” of negotiations and “discuss next steps”.

Von der Leyen confirmed she would hold a video conference with Johnson over the weekend.

“We want a deal because we think it is better to have a deal as neighbours,” she told journalists on Friday afternoon.

“In these Covid times with devastating impact on the economies, it is good to have a deal – but not at any price.”

The pound jumped higher against both the euro and the dollar after Downing Street announced the meeting on Friday morning. Shortly after the statement, sterling was up 0.4% against the euro (GBPEUR=X) to €1.1006 and up 0.1% against the dollar (GBPUSD=X) to $1.2902.

The pound spiked agains the euro after the announcement. Photo: Yahoo Finance UK
The pound spiked agains the euro after the announcement. Photo: Yahoo Finance UK

“We have made progress on many many different fields but of course the most difficult ones are still completely open,” Von der Leyen told a news conference in Brussels. “There is still a lot of work to do.”

Confirmation of the high-level meeting marks the first time both Johnson and von der Leyen have directly intervened in Brexit negotiations since June. Then, both parties agreed to intensify talks and agreed “new momentum” was needed.

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The June meeting was viewed positively at the time but has failed to break the deadlock. Negotiators on both sides have repeatedly warned of little progress. Talks are said to be stuck on points including Britain’s post-Brexit state aid policy, fisheries, and Northern Ireland.

“Overall, where there is a will there is a way so I think we should intensify the negotiations because it is worth working hard on it,” Von der Leyen told journalists.

“We are running out of time – around 100 days to the end of the year so it is worth to step up now.”

European Commission President Ursula von der Leyen speaks during a press conference at an EU summit in Brussels, Friday, Oct. 2, 2020. European Union leaders assessed the state of their economy and the impact of the coronavirus pandemic on it during their final day of a summit meeting. (John Thys, Pool via AP)
European Commission president Ursula von der Leyen speaks during a press conference at an EU summit in Brussels, on Friday. Photo: John Thys/AP

The ninth round of trade talks between the EU and UK are due to conclude in Brussels today (Friday). Speculation had mounted that both sides could enter the “tunnel” — the secret final stage of negotiations where the final text of a deal would be agreed. A statement on the progress of negotiations from both sides is likely later today.

Milan Cutkovic, market analyst at Axi, said: “The Brexit talks have reached a critical phase. There are still significant obstacles, but both parties seem to have recently stepped up efforts to reach a deal.”

The intervention from Johnson and von der Leyen comes amid heightened tensions between the UK and the EU. von der Leyen on Thursday announced that the EU would begin legal action against the UK over its plans to break part of the Brexit Withdrawal Agreement related to Northern Ireland.

Watch: What is a no-deal Brexit and what are the potential consequences?