The pound fell against the dollar and euro on Thursday, little changed after Wednesday's reports that Brexit talks are at an impasse, and still held down by speculation about negative interest rates. Sterling fell 1% on Wednesday after Britain told the European Union on Wednesday it needed to break a fundamental impasse to clinch a Brexit trade deal by the end of the year. The pound is close to its lowest levels in more than three decades, as it grapples with Brexit, speculation about negative interest rates in Britain, a deep recession and a growing pile of debt.
Britain told the European Union on Wednesday it needed to break a fundamental impasse to clinch a Brexit trade deal by the end of the year and said an agreement on fisheries might not be ready by July. The United Kingdom left the EU on Jan. 31 but the main terms of its membership remain in place during a transition period until the end of this year, allowing it time to negotiate a new free trade deal with the bloc. Asked whether it was possible to reach a trade agreement in the short time remaining, British Cabinet Office Minister Michael Gove said: "My judgment is that it's perfectly possible to do so."
Sterling fell 1% on Wednesday as investors' focus shifted back to the possibility of negative interest rates in Britain and on comments from government officials that not much progress had been made in Brexit negotiations. Britain told the European Union on Wednesday it needed to break a fundamental impasse to clinch a Brexit trade deal by the end of the year and said an agreement on fisheries might not be ready by July. Britain's negotiator with the EU, David Frost, also reiterated that the UK would not extend the Brexit transition period beyond December.
The EU is willing to shift its stance on fisheries in negotiations with Britain next week, sources said, in what would be the first major concession from the bloc in talks on their new relationship after Brexit. Fishing is particularly politically sensitive for France, and the 27-nation bloc says it would not seal a new trade deal with Britain without a stable agreement on that issue. Currently, fishing mostly takes place in UK waters but most of the catch goes to European Union fishermen.