Pound surges after Michel Barnier hints EU prepared to offer UK a deal 'like no other' after Brexit
Video report by ITV News Political Correspondent Carl Dinnen
The pound jumped on Wednesday after Michel Barnier hinted the EU was prepared to offer Britain a relationship "such as there never has been" post-Brexit.
With seven months to go until the UK is due to leave the EU, the bloc's chief negotiator hinted that a bespoke deal could soon be achieved.
And Brexit secretary Dominic Raab also sounded positive that a deal is "within our sights".
But, although he suggested Britain could get a unique deal, Mr Barnier said the EU would not allow any deal that effects the status of the single market, saying: "There is no single market a la carte."
The pound rallied to a three-week high following Barnier’s remarks despite him ruling out special regulations for the City.
The British currency jumped almost 1% versus the dollar and euro to touch 1.300 and 1.111 respectively.
Speaking in Berlin, Barnier told reporters: "We are prepared to offer Britain a partnership such as there never has been with any other third country.
“We respect Britain’s red lines scrupulously. In return, they must respect what we are,” he said. “Single market means single market ... There is no single market a la carte.”
Barnier made similar comments last week but they did not have the same effect on financial markets.
Britain and the EU are trying to hammer out an agreement on divorce terms and future trade by the European Council summit on 18 October.
Today, Raab hinted the timing of the Brexit talks could creep beyond the mid-October deadline which could force an emergency Brexit summit in November.
This would leave very little time for any agreement to be ratified by the member states before the UK leaves the bloc on 29 March.
Addressing members of the Lords EU Committee in Parliament over the UK's exit from the European Union on Wednesday, Raab said: "I'm confident that a deal is within our sights. We're bringing ambition, pragmatism, energy and if, and I expect it will be, and if it is matched, we get a deal."
He added: "I think it is important as we enter the final phase of the negotiations in the lead up to the October council and the possibility that it may creep beyond that, we want to see some renewed energy."
Despite the positive reaction to Barnier's hint of a Brexit breakthrough and Raab's optimism, talks were far from over, with the Northern Ireland border remaining the "last big hurdle".
Barnier said: "It's important that this guarantee is given regardless of what the EU and Great Britain agree on because this is the only way to maintain the Good Friday Agreement providing peace in Northern Ireland."