Betting odds put UK-EU trade deal in 2020 at 66%

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The EU's chief Brexit negotiator Michel Barnier expressed confidence at a closed-door meeting with EU envoys last Friday that a new deal with the UK was possible. Photo: Kirsty O'Connor/PA via AP
The EU's chief Brexit negotiator Michel Barnier expressed confidence at a closed-door meeting with EU envoys last Friday that a new deal with the UK was possible. Photo: Kirsty O'Connor/PA via AP

Betting odds have put a UK-EU trade deal in 2020 at 66%, according to peer-to-peer betting exchange Smarkets.

For the first time since February, it is more likely than not that the UK and European Union will sign a trade deal in 2020, prediction-market data from Smarkets suggests.

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The odds are currently sitting at 66%, up 22 percentage points in two weeks.

Patrick Flynn, Smarkets political analyst puts this down to the EU’s chief negotiator Michel Barnier making “some positive noises about the prospect of a trade deal by the end of the year.”

Barnier expressed confidence at a closed-door meeting with EU envoys last Friday that a new deal with the UK was possible, according to Reuters.

The EU says a deal needs to be done by October to allow time for ratification by the end of the year. Both sides have said the talks may be stalling.

READ MORE: UK economy won't fully recover until 2024

The two sides have been deadlocked since talks began at the start of the year. Negotiations have stalled on the issue of EU access to UK fishing waters, state aid rules, and how to ensure a “level playing field” between EU and UK companies.

If a deal cannot be reached, the UK risks a disruptive end to current trading terms with the EU in January. Barnier said such an outcome would add “additional friction” to trade between Britain and the EU.

“I remain confident that a balanced and sustainable deal remains possible, even if less ambitious,” Barnier said at the meeting on Friday, sources present told Reuters, adding that Britain seemed more interested in pursuing only a “low-quality, low-profile” deal.

He said his recent encounter with Boris Johnson had left him feeling that the British prime minister did want a deal, despite insisting that he was prepared for the prospect that the two sides might not come to an agreement at all.

“According to Barnier, the UK has downgraded its ambitions regarding the scope of a deal and the markets have responded accordingly. It remains a 3-in-4 chance that the Brexit transition period will not be extended beyond the end of 2020 in light of this possible breakthrough,” Flynn said.

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In other political betting, Ed Davey heads the market with a 2-in-3 chance of victory in the Liberal Democrat leadership election. Layla Moran finds herself second favourite, but is trailing far behind on 35%, according to Smarkets. 

Across the Atlantic, Joe Biden continues to comfortably lead Donald Trump in the odds for next president of the United States. The former vice-president is currently trading at 62%, which beats the Trump’s all-time high of 61% set in February this year.

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