As mentioned in previous daily updates, the subject of fisheries has always been seen as a byword for the overall progress of the Brexit talks – due to its highly politicised nature. Both the UK and the EU have steadfastly dug their heels in with regards to the lucrative North Sea fish stocks, hampering progress on more substantive issues, such as financial regulation. However, much to sterling’s delight yesterday, the UK chief negotiator David Frost announced that an initial agreement with Norway had been signed which is largely seen as a gateway to wider agreement on the fisheries issue.
Of course, the pound was never going to rise that far on fisheries news alone, but rather what the agreement represents going into the last days of the negotiating cycle before the October EU Council meeting. Further to this, the news that the UK is looking to offer the EU a three-year transitional period on fish stocks to get onto the next phase of negotiating, has also given pound markets some additional hope.
From here, if sterling can avoid more doom and gloom deadlock headlines by the end of the week, the path should be clear for the UK and EU to move to the ‘tunnelling’ period, where both sides seek to privately thrash out some kind of deal. A deal on what though at this stage remains to be seen.
Have a great day.
Author: Joshua Haden-Jones, Senior Relationship Manager
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