UK ready to quit EU on 'Australia terms' if no Brexit deal, Johnson says – Reuters

Reuters reported on how Britain will be ready to quit its transitional arrangements with the European Union “on Australia terms” if no deal on their future relationship is reached,.

The article explained that Prime Minister Boris Johnson told this to his Polish counterpart Mateusz Morawiecki on Saturday.

Key points

Britain left the bloc on Jan. 31. A transition period, during which Britain remains in the European single market and customs union, expires on Dec. 31 and pressure is mounting to agree a free trade deal before then.

With the two sides still far apart, a round of 'intensified negotiations' is due to start next week.

“He (Johnson) said the UK would negotiate constructively but equally would be ready to leave the transition period on Australia terms if agreement could not be reached,” Johnson’s Downing Street office said in a statement.

Australia does not have a comprehensive trade agreement with the EU. Much of EU-Australia trade follows default World Trade Organisation rules, though specific agreements are in place for certain goods.

Market implications

The “intensified negotiations" will be a weight on GBP. 

• GBP/USD Forecast: Brexit tensions to keep the Pound pressured