EU’s chief negotiator Brexit Michel Barnier said on Friday that Britain and the European Union only had hours remaining to reach a trade agreement that would prevent a turbulent finale to the Brexit crisis in less than two weeks.
Race against time
As the Brexit talks deepen, both sides demand compromise from the other, with frequent conflicting messages that “an agreement is possible, an agreement is in serious trouble, or a deal is close.”
“We have very little time remaining, just a few hours to work through these negotiations in a useful fashion if we want this agreement to enter into force on the first of January,” Barnier told the European Parliament in Brussels.
“It’s the moment of truth. There is a chance of getting an agreement but the path to such an agreement is very narrow,” he said.
Leaders involved: UK Prime Minister Boris Johnson had another phone call Thursday with European Commission President Ursula von der Leyen.
Johnson underlined that the negotiations were in a “serious state” and it seems very likely that an agreement will not be reached unless the EU position changed significantly.
Von der Leyen said progress had been made, but it would be “very difficult” to come to a consensus in some areas, particularly fishing.
BoE’s interest options
Speaking after the BoE’s last 2020 policy meeting, the Bank of England policymaker Gertjan Vlieghe said on Friday that the bank may need to accelerate its stimulus program, including bringing interest rates below zero in order for the economy to fully recover from the coronavirus collapse.
Vlieghe had previously stated that he sees little risk that negative interest rates will have the opposite effect.
But other BoE officials are more suspicious of negative rates. The minutes of the Central Bank’s latest policy meeting, published on Thursday, did not address the issue, with the bank keeping its interest rates at 0.1%.
“Once we talk about adding significant stimulus to the economy, then the rate cut we can do without going negative is obviously very small,” Vlieghe told Bloomberg in an interview on Friday.
“The risk it ends up being counterproductive is low, and therefore if we find ourselves in circumstances where we need more stimulus, that would be a risk I’m willing to take.”
Put into perspective: The central banker said that the coronavirus hit investment and employment. Sterling and British government bond yields fell following the publication of Vlieghe’s comments.
China recovery
Xinhua, the official news agency of the Communist Party of China, wrote on Friday that following the conclusion of an economic meeting of top leaders Beijing will continue its support for economic recovery in 2021, avoiding a sudden change in fiscal and monetary policies to help keep economic growth within a reasonable range.
The annual Central Economic Work Conference, a gathering of top leaders and policymakers, is watched by investors amid speculation that Beijing will make policy changes as the economy recovers after the Covid19 virus recession earlier this year.
Recovery move: China, the world’s second largest economy and cheap labor and factor source, will maintain its “proactive fiscal policy” and make its monetary policy flexible and targeted, Xinhua said, referring to the statement published after the meeting held behind closed doors between December 16 and 18.
“We must maintain the continuity, stability and sustainability of macro policies next year. We must continue to implement a proactive fiscal policy and a prudent monetary policy, and maintain the necessary support for economic recovery,” Xinhua wrote.
The People’s Central Bank of China (PBoC) has implemented a series of relief measures since February to support the virus-shaken economy, but analysts say it is taking a more stable stance as the economy improves.
Bitcoin rise
Bitcoin, the world’s most popular cryptocurrency, continues to set new records of over $23,000 this week after initially surpassing $20,000.
BTCUSD was priced between $22,475 and $23,284 on Friday, with this year’s appreciation tripling the cryptocurrency’s value since the beginning of the year.
Background: While the new Bitcoin rally brings to mind the boom in 2017 and the collapsing bubble that followed, crypto market bulls point to increased demand from institutional investors in Bitcoin’s recent rally. Bitcoin is being used as a protection against inflation, like gold, while most people watch unprecedented US economic aid package in action or negotiation since earlier this year.
