Boost for pound over Brexit deal speculation

The pound has rallied following speculation a Brexit deal could safeguard the City's access to European Union markets.

Brexit Secretary Dominic Raab set off a flurry of speculation when he appeared to suggest a Brexit agreement could be done within three weeks.

A report in The Times suggested a tentative deal had been reached on all aspects of a future partnership on services and the exchange of data.

Such a deal would guarantee UK companies access to EU markets as long as domestic regulations remained broadly aligned with those set by Brussels.

Sterling was up nearly 1% versus the dollar overnight at 1.28 US dollars.

In March, Philip Hammond warned the EU's existing regulatory equivalence regime was "wholly inadequate for the scale and complexity of UK-EU financial services trade", in part because it allows Brussels to unilaterally end the relationship with little or no notice.

The blueprint reported in The Times would appear to address some of those concerns, with neither side able to unilaterally declare regulations have fallen out of equivalence and block access to their markets without first going through independent arbitration and providing a notice period significantly longer than the current 30 days.

However, there was confusion in Westminster over how close an overall Brexit deal may be.

Mr Raab was accused of a "messy U-turn" after he indicated he expected an EU withdrawal deal finalised by November 21, only for his department to later insist there was no set date.

In a letter to the House of Commons Exiting the EU Committee, Mr Raab wrote: "I would be happy to give evidence to the committee when a deal is finished and currently expect November 21 to be suitable."

But, after the letter became public, the Department for Exiting the European Union said "there is no set date for the negotiations to conclude" and November 21 "was the date offered by the chair of the select committee for the Secretary of State to give evidence".

Shadow Brexit secretary Sir Keir Starmer was scathing, saying: "What a mess."

Downing Street would not be drawn on the date, with a spokesman for Prime Minister Theresa May stating: "We want to get a deal as soon as possible and that's what we're working to achieve."

Asked about the November 21 date, Foreign Secretary Jeremy Hunt said: "I think it's entirely possible that we could make progress, enough progress, by then."