The Bank of England is reminding British banks to prepare for the possibility that the U.K. and the European Union will fail to agree on a trade deal by the end of the year, amid few signs of progress in discussions between the two sides.
In a statement Wednesday following reports that its governor, Andrew Bailey, is asking banks to step up their preparations for a “no-deal” scenario, the Bank of England said it is “fundamental” that it prepares the financial system for “all risks that it might face.”
“In performing that role, the Governor meets the leadership of U.K. banks on a very regular basis," it said.
FILE - In this Monday, Feb. 10, 2020 file photo, European Commission's Head of Task Force for Relations with the United Kingdom Michel Barnier speaks during a media conference in Luxembourg. Slowed by the coronavirus pandemic and whipped up by a British-imposed deadline, talks between the EU and the UK on a future relationship in the wake of Brexit are struggling to make significant progress. A third negotiation session is drawing to a close on Friday, May 15, 2020 but so far, just over 100 days after the official exit of the UK from the EU, fundamental gaps still exist. (AP PhotoFrancisco Seco, File)
"As we have said previously, the possibility that negotiations between the U.K. and EU over a future trading relationship might not conclude in a deal is one of a number of outcomes that U.K. banks need to prepare for over the coming months.”
Though the U.K. left the EU's political institutions in January, it remains within its economic orbit — the tariff-free single market and customs union — until the end of the year.
The country has an option to extend this so-called transition period designed to smooth the Brexit process, but Prime Minister Boris Johnson has insisted he won't be asking for a delay. Any request has to be made by July 1.
FILE - In this Wednesday, Feb. 5, 2020 file photo, European Commission's Head of Task Force for Relations with the United Kingdom Michel Barnier, right, is greeted by David McAllister, the German EU parliamentarian who is the legislature's top official on the bilateral relations. Slowed by the coronavirus pandemic and whipped up by a British-imposed deadline, talks between the EU and the UK on a future relationship in the wake of Brexit are struggling to make significant progress. A third negotiation session is drawing to a close on Friday, May 15, 2020 but so far, just over 100 days after the official exit of the UK from the EU, fundamental gaps still exist. (AP PhotoFrancisco Seco, File)
Discussions over a trade deal have made little headway, with both sides arguing that the other is creating unnecessary obstacles. The British government says the EU is being unreasonable on fishing rights, for example, while the EU counters that the U.K. is trying to cherry-pick the best parts of being a member of the bloc.
And that's raised concerns that the British economy faces the prospect of a ‘no deal’ scenario at a time of acute stress related to the coronavirus pandemic.
Japanese carmaker Nissan joined other businesses in expressing concerns, warning it will not be able to sustain operations at its plant in Sunderland, northeast England, if the negotiations fail to lead to a trade deal.
European Union's chief Brexit negotiator Michel Barnier speaks during a media conference, following the third round of Brexit talks between the EU and Britain, at EU headquarters in Brussels, Friday, May 15, 2020. Talks between the European Union and the United Kingdom on their future relationship in the wake of Brexit have ground to a near-standstill despite the urgency for progress before a summit next month.(Francois Lenoir, Pool Photo via AP)
Nissan’s global chief operating officer, Ashwani Gupta, told the BBC that the company wants to remain in the U.K. but that the business “will not be sustainable” if the current tariff-free arrangement disappears.
“That’s what everybody has to understand," he said.
Another round of Brexit talks is taking place via video conferencing and is expected to conclude Friday. Johnson is then expected to take part in a summit with EU leaders this month.
Follow AP’s full coverage of Brexit and British politics at https://www.apnews.com/Brexit
MADRID (AP) — British and Spanish foreign ministers said a new round of talks held Friday over the status of the disputed territory of Gibraltar following Britain’s exit from the European Union were productive and significant progress was made.
The meeting was between Spain's José Manuel Albares, Britain’s David Cameron and European Commission Vice-President Maros Sefcovic in Brussels. Gibraltar Chief Minister Fabian Picardo also attended. It was the first time representatives from the four areas had come together for talks on the issue.
In a statement after the meeting, the parties said "discussions took place in a constructive atmosphere, with significant progress achieved.
“General political lines have been agreed (on), including on airport, goods and mobility. Negotiations will continue over the coming weeks to conclude the EU-UK Agreement,” it added.
All sides are eager to clinch a deal before European elections in June.
Britain left the European Union in 2020 with the relationship between Gibraltar and the bloc unresolved. Talks on a deal to ensure people and goods can keep flowing over the Gibraltar-Spain border have made halting progress in the 19 rounds of negotiations so far, but both Spanish and U.K. officials have recently expressed optimism about a deal.
In Britain’s 2016 Brexit referendum, 96% of voters in Gibraltar supported remaining in the EU. The tiny territory on Spain's southern tip depends greatly on access to the EU market for its 34,000 inhabitants.
Gibraltar was ceded to Britain in 1713, but Spain has maintained its sovereignty claim ever since. Relations concerning the Rock, as it is popularly referred to in English, have had their ups and downs over the centuries.
A major sticking point has been who controls Gibraltar’s airport, which under the proposed free-movement deal would be an external border of the EU. The U.K. and Gibraltar have resisted Spain’s insistence that Spanish border officials be based at the airport, which is also home to a Royal Air Force base.
The British Foreign Office said Thursday that while it did not expect a final agreement Friday, "getting senior political figures from the UK, European Commission, Spain and Gibraltar in one room is significant.”
Associated Press writer Jill Lawless reported from London.
Gibraltar Chief Minister Fabian Picardo speaks with the media outside EU headquarters in Brussels, Friday, April 12, 2024. British and Spanish foreign ministers are scheduled to meet Friday with a top European Commission official for another round of negotiations over the status of the disputed territory of Gibraltar following Britain's exit from the European Union. (AP Photo/Omar Havana)
Gibraltar Chief Minister Fabian Picardo stands outside EU headquarters in Brussels, Friday, April 12, 2024. British and Spanish foreign ministers are scheduled to meet Friday with a top European Commission official for another round of negotiations over the status of the disputed territory of Gibraltar following Britain's exit from the European Union. (AP Photo/Omar Havana)
Gibraltar Chief Minister Fabian Picardo speaks with the media outside EU headquarters in Brussels, Friday, April 12, 2024. British and Spanish foreign ministers are scheduled to meet Friday with a top European Commission official for another round of negotiations over the status of the disputed territory of Gibraltar following Britain's exit from the European Union. (AP Photo/Omar Havana)
Gibraltar Chief Minister Fabian Picardo, center, walks with his delegation outside EU headquarters in Brussels, Friday, April 12, 2024. British and Spanish foreign ministers are scheduled to meet Friday with a top European Commission official for another round of negotiations over the status of the disputed territory of Gibraltar following Britain's exit from the European Union. (AP Photo/Omar Havana)
Gibraltar Chief Minister Fabian Picardo speaks with the media outside EU headquarters in Brussels, Friday, April 12, 2024. British and Spanish foreign ministers are scheduled to meet Friday with a top European Commission official for another round of negotiations over the status of the disputed territory of Gibraltar following Britain's exit from the European Union. (AP Photo/Omar Havana)
Spain's Foreign Minister Jose Manuel Albares Bueno speaks with the media outside EU headquarters in Brussels, Friday, April 12, 2024. British and Spanish foreign ministers are scheduled to meet Friday with a top European Commission official for another round of negotiations over the status of the disputed territory of Gibraltar following Britain's exit from the European Union. (AP Photo/Omar Havana)
Spain's Foreign Minister Jose Manuel Albares Bueno, right, walks outside EU headquarters in Brussels, Friday, April 12, 2024. British and Spanish foreign ministers are scheduled to meet Friday with a top European Commission official for another round of negotiations over the status of the disputed territory of Gibraltar following Britain's exit from the European Union. (AP Photo/Omar Havana)
Spain's Foreign Minister Jose Manuel Albares Bueno speaks with the media outside EU headquarters in Brussels, Friday, April 12, 2024. British and Spanish foreign ministers are scheduled to meet Friday with a top European Commission official for another round of negotiations over the status of the disputed territory of Gibraltar following Britain's exit from the European Union. (AP Photo/Omar Havana)
Spain's Foreign Minister Jose Manuel Albares Bueno speaks with the media outside EU headquarters in Brussels, Friday, April 12, 2024. British and Spanish foreign ministers are scheduled to meet Friday with a top European Commission official for another round of negotiations over the status of the disputed territory of Gibraltar following Britain's exit from the European Union. (AP Photo/Omar Havana)
Spain's Foreign Minister Jose Manuel Albares Bueno speaks with the media outside EU headquarters in Brussels, Friday, April 12, 2024. British and Spanish foreign ministers are scheduled to meet Friday with a top European Commission official for another round of negotiations over the status of the disputed territory of Gibraltar following Britain's exit from the European Union. (AP Photo/Omar Havana)
FILE - Aerial view of Gibraltar rock taken from the neighbouring Spanish city of La Linea, on Oct. 17, 2019. British and Spanish foreign ministers are to meet in Brussels on Friday April 12, 2024 in a bid to take a giant leap forward on talks over the status of the disputed territory of Gibraltar following Britain's exit from the European Union. All sides are eager to clinch a deal before European elections in June which could set the clock back. Britain left the European Union in 2020 with the relationship between Gibraltar and the bloc unresolved. (AP Photo/Javier Fergo, File)
FILE - People walk past a Brexit information office at the British territory of Gibraltar, on Jan. 31, 2020. British and Spanish foreign ministers are to meet in Brussels on Friday April 12, 2024 in a bid to take a giant leap forward on talks over the status of the disputed territory of Gibraltar following Britain's exit from the European Union. All sides are eager to clinch a deal before European elections in June which could set the clock back. Britain left the European Union in 2020 with the relationship between Gibraltar and the bloc unresolved. (AP Photo/Javier Fergo, File)
