Markets have shown what a deal could yield
This is the week in which it will become clear whether Boris Johnson’s government has secured an agreement with the European Union.
If he has (and the signs are encouraging, if not yet cause for celebration) then he’s only half way out of the woods.
MPs will sit on Saturday — the first weekend sitting since the Falklands War — when they will either accept or reject the government’s proposals.
Wavering Brexiters are being offered warm words by Jacob Rees-Mogg while between 20 and 30 Labour MPs are poised to back a deal, against Jeremy Corbyn’s command.
The DUP will be hard to please and some anti-Brexit MPs, including those slung out of the Tory party by Johnson, will try to ensure that any deal is put to a ‘confirmatory referendum.’ So, hurdles remain. A glimpse of what life could be like on the other side of a deal-signing ceremony emerged at the end of last week, when news first emerged that Johnson and Ireland’s Leo Varadkar had enjoyed positive and productive talks.
When JP Morgan declared on Friday afternoon “we now expect a deal” (having previously given such an outcome a mere 35 per cent chance) sterling spiked to a three and a half-month high against the dollar while the FTSE witnessed some tremendous gains.
RBS, Lloyds, Barclays and HSBC all closed higher as did Bovis, Persimmon, Taylor Wimpey and Berkeley Homes as investors contemplated a housebuilding sector free from the risks of a no-deal exit.
Analysts also attributed large gains in the utilities and energy sectors to the fact that a Brexit deal reduces the likelihood of a Labour government after the next election — the costs of which are laid bare on our front page today.
While more and more City voices claim they would reluctantly prefer no-deal to yet more delay, a negotiated outcome remains infinitely preferable.
Varadkar said after his three-hour meeting with Johnson that he is completely convinced Downing Street wants a deal.
The EU’s negotiators are also taking this chance seriously and it is distinctly possible that the two sides come to terms this week — even if a technical extension beyond 31 October is required to implement it.
If MPs are given a chance to pass a deal on Saturday, they must take it.
Main image: Getty