It feels as though we’re copy and pasting an old story. The pound sterling drops as two sides willing to negotiate and unwilling to compromise, hit another stalemate over the allocation of post Brexit fishing rights.
Michel Barnier made his way to London on Friday, following news that the UK negotiating team had turned down an offer by team EU to cede between 15% and 18% of their current fishing quota.
“The UK has already blown Michel Barnier’s plan to boost British fishing quotas by up to 18 percent out of the water before it arrives in London,” said Joe Barnes, Brussels Correspondent for The Express.
Barnes added that his source on the UK side told him: “it’s derisory, nothing more to say about it.”
Prime Minister Boris Johnson offered a lukewarm response, merely saying that: “substantial and important differences to be bridged”.
Perhaps more concerning, though, was that even EU sources weren’t in favour of the concessions being offered by Barnier. Speaking to BBC Brussels Correspondent, Chris Beake, the source said they were ‘surprised’ by Barnier’s proposal. One diplomat added that the percentage bracket was just one of many that had been discussed in recent weeks, and would be a ‘very high price to pay’ for the EU’s fishing-reliant countries.
Beake said that after the Brexit transition, the UK is demanding the right to double its own catch quota within its own waters, as a result of claiming independent status. The bottom line, though, was that more percentages were likely to be ‘bandied around’ in the coming weeks, though an agreement on fishing still seems a long way off.
Following these developments, the pound sterling fell by 0.76% against the euro, down to a rate of 1.1125 GBP/EUR. Likewise, cable (GBP/USD) dropped 0.44% to 1.3298. Speaking on the Brexit fishing stalemate and the situation as it stands, IG Senior Market Analyst, Joshua Mahony, said that:
“The issues of fishing right, state aid, and future dispute resolution remain a trio of hurdles which remain the three major sticking points which could ultimately lead the UK out of the EU without a deal.”
“Nevertheless, with the pound having gained ground against the euro over recent months, it is clear that traders either expect a last-minute breakthrough or have simply taken on a more relaxed stance to what originally touted as the worst-case scenario in 2016.”