Brexit talks between the UK and EU have been paused, with both sides citing “significant divergences” on the roadblocks standing in the way of a trade deal.
Prime Minister Boris Johnson and European Commission President Ursula von der Leyen will speak on Saturday to try to break the impasse.
Chief negotiators from both sides, David Frost and the EU’s Michel Barnier said they would brief leaders to seek new impetus for the talks.
The UK and the EU will exit the Withdrawal Agreement on 1 January, which had offered businesses continuity of rules.
If no new deal is agreed trade will default to World Trade Organization terms – significantly more expensive for businesses and consumers than the current Single Market.
Thorny issues remain
Months of negotiations have revealed the three thorniest issues – fisheries, ensuring fair competition guarantees and ways to solve future disputes.
But so far neither side has walked away from the talks, suggesting that both still hold out some hope of securing a deal.
A deal would govern almost $1 trillion of annual trade to avoid a disorderly Brexit.
“After one week of intense negotiations in London, the two chief negotiators agreed today that the conditions for an agreement are not met, due to significant divergences on level playing field, governance and fisheries,” they said in a statement.
“They agreed to pause in order to brief their principals on the state of play of the negotiations. (European Commission) President (Ursula) von der Leyen and Prime Minister (Boris) Johnson will discuss the state of play tomorrow afternoon.”
Sterling sank by as much as half a cent against the U.S. dollar, weakening to $1.342 from $1.347.
The pound was also lower against the euro.
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