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Brexit trade deal marathon heads to the finish line

Britain and the European Union appeared close to clinching a long-elusive trade agreement on Wednesday, raising hopes that they were now set to avoid a turbulent economic rupture on New Year’s Day.

A senior British government source said Prime Minister Boris Johnson was poised to do a trade deal with the EU, after media reports said the agreement had already been done, just over a week before Britain completes its journey out of the bloc.

But there was no official confirmation from either side that the months of negotiations had reached a conclusion.

A source at the EU’s executive Commission said talks were still under way – though in their “final stages” – and one EU official cautioned against excluding the risk of a “no deal” scenario on Jan. 1.

Another British government source was also cautious, saying: “Negotiations are ongoing.”

Still, three diplomatic sources in the bloc told Reuters that member states had started to prepare their procedure to implement any deal from Jan. 1, if one was agreed.

Since formally leaving the EU on Jan. 31, the United Kingdom has been negotiating a free trade deal with the 27-member bloc in an attempt to ease its exit from the EU’s single market and customs union at the end of this year.

An accord would ensure that the goods trade that makes up half of annual EU-UK commerce, worth nearly a trillion dollars in all, remains free of tariffs and quotas.

One senior EU diplomat, who spoke on condition of anonymity, said a provisional application of the deal with effect from Jan. 1 would need to be approved by member states because there was not enough time for the European Parliament to ratify it.

Much earlier in the day, British Housing Secretary Robert Jenrick said two significant issues – fishing and competition – still remained to be resolved and that there had not been sufficient progress for a deal.

However, a French official told Reuters that the British had made “huge concessions” in negotiations over the past 48 hours, mostly on access to fishing in its waters.

Sterling jumped more than 1.1% against the dollar on perceived prospects of a deal while bond yields rose, and prices fell, in Britain, Europe and the United States.

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