Brexit Bulletin: Grim Tidings

Brexit is 42 days away.

(Bloomberg) --

Today in Brexit: Officials on both sides paint a grim picture of the state of play in divorce talks.

What’s Happening? Brexit negotiations are not in a happy place. As Bloomberg’s Ian Wishart and Tim Ross report today, one EU official compared the state of play to a game of chicken, with two cars driving towards each other at high speed, each expecting the other to swerve out of the way. It’s not the first time that analogy has been used to described the Brexit situation.

This week’s events Have clarified what European Union leaders want to know: Does U.K. Prime Minister Boris Johnson have a Brexit plan, and if so when can they see it?

There are small chinks of light. Arlene Foster, leader of Northern Ireland’s Democratic Unionist Party, said late Wednesday that her party — which voted against Theresa May’s Brexit deal three times — is prepared to consider solutions to the Brexit impasse that apply only to Northern Ireland, as long as they include an element of local consent. That’s the clearest signal yet that the DUP is ready to compromise. But she again ruled out any deal that an includes a “backstop” to prevent a hard border on the island of Ireland. In a further sign of detente, Foster met with Irish Prime Minister Leo Varadkar in Dublin for 45 minutes on Wednesday. The duo agreed to stay in touch, a government spokesman said.   

Shaping a deal remains difficult, and Johnson is still reluctant to show his hand. France and Finland (which holds the rotating EU presidency) now say that the U.K. must present firm proposals by the end of this month, which will the be discussed at the crucial EU summit less than two weeks before Brexit day. EU President Jean-Claude Juncker’s take yesterday was that the risk of a no-deal divorce is now “palpable.” It’s likely that the British would prefer to show their hand later, rather than sooner.

Today’s Must-Reads

• The U.K. needs a written constitution after Brexit to replace the “shattered old order,” Allister Heath writes in the Telegraph.
• What’s it like to lock horns with Dominic Cummings? Tortoise’s Chris Cook shines a light on how Boris Johnson’s right-hand man operates.
• British readers of a certain age might remember Robert Kilroy-Silk. Patrick Maguire of the New Statesman visited the former Labour MP, chat-show host and “godfather of Brexit” for a rare and insightful interview.

Brexit in Brief

Under Fire | Boris Johnson’s motives for suspending parliament came under sustained attack in the U.K. Supreme Court on Wednesday, and one of the 11 justices insisted on a written undertaking explaining what the government would do if it loses the case. The three-day hearing ends today, with the justices retiring to consider their verdict. Culture Secretary Nicky Morgan told ITV’s Peston show that the government will heed any verdict.

Banking Jobs | The expected rush of investment bank jobs out of London is still just a trickle, according to a study. Banks have moved just 1,000 posts to rival hubs like Frankfurt and Paris since the referendum in June 2016, a report by EY said. That contrasts with some estimates of tens or even hundreds of thousands shifting to the EU as a result of Brexit.

Pound Bets | Money-market traders have quietly accumulated more than one million derivative contracts that will pay off if the U.K. central bank cuts interest rates by 50 basis points in the wake of a disruptive Brexit. The bet on big monetary easing comes just before today’s Bank of England meeting, the last one before the Oct. 31 deadline. For now, the central bank is seen keeping interest rates unchanged as it awaits clarity on Brexit.

Binge-Watching | ITV Plc Chief Executive Officer Carolyn McCall said the Brexit saga has briefly turned Parliamentary democracy into something more akin to a hit reality TV show. “For much of the year, some of the best drama on TV has been delivered by the news,” McCall said at the Royal Television Society’s annual media convention in Cambridge.

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To contact the editor responsible for this story: Neil Callanan at ncallanan@bloomberg.net, Leila Taha

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