Traders Prepare For Shock UK-EU Split

By Staff of Admiral Markets

Access To Financial Markets Made Easy • Sep 11, 2020 at 4:43 AM EDT

Talks between UK and EU negotiators have reached rock bottom after a series of shocking events that have stunned governments and economists all over the world.

Talks between UK and EU negotiators have reached rock bottom after a series of shocking events that have stunned governments and economists all over the world. Earlier in the week, the UK government prepared an Internal Market legislation that directly goes against the commitments made in the Brexit Withdrawal Agreement and the Northern Ireland protocol.

Traders prepare for shock UK-EU split

Here's what has unfolded so far:

The EU was given no notice of this
The EU has given the UK government until the end of the month to scrap this legislation or face legal action for breaking the treaty
UK Prime Minister Boris Johnson held a crisis meeting on Thursday in which he rebuffed the EU's request
Senior Cabinet Minister Michael Gove says he told Maros Sefcovic, the European Commission Vice President, that "we would not be withdrawing this legislation."

The move has sent the British pound crashing lower against all other currencies with the British pound against the US dollar falling more than 5% in just a few days.

While the eighth round of talks are still underway both Michel Barnier and David Frost, the two lead negotiators for the EU and UK respectively, have expressed that a number of challenges still remain and some are still significant.

As Boris Johnson has moved up the deadline to secure a trade deal to 15 October, there is an increasing chance the UK will not reach a trade agreement with the EU by the end of year deadline when the transition period to negotiate terms ends. This means tariffs will be triggered between the European Union - the world's biggest single market - and the UK.

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