The UK Prime Minister Boris Johnson and European Commission president Jean-Claude Juncker say they have finally agreed a Brexit deal.
The news sent the pound soaring higher than $1.29 for the first time since May, with Juncker describing the deal as “a fair and balanced agreement for the EU and the UK”.
However, the leader of the Democratic Unionist Party, Arlene Foster, has yet to confirm that her party will back the deal, which is seen by some as treating Northern Ireland as collateral damage.
Trade Cboe UK Brexit High 50 - BUKHI50P CFD
Parliament can still defeat the bill, which commits to “a trading relationship on goods that is as close as possible” and customs arrangements that “obviate the need for checks on rules of origin”
Johnson must secure agreement of the bill by Saturday 19 October to prevent the so-called Benn Act taking effect. The Benn Act forces the prime minister to request an extension to avoid a no deal.
This is something Johnson has said he would never do. “We don’t contemplate defeat,” Michael Gove, the Cabinet Office minister in charge of no-deal planning, told Sky News.
So-far cautious EU leaders will meet on 17 and 18 October to discuss the deal.
Analysts and commentators are also cautiously optimistic. Some expect the pound to hit $1.35 and UK financial assets to rally if the deal is approved. UK government bonds were selling off, pushing the 10-year yield to 0.76 per cent.