Brexit news: Bank of England predicts post-transition hit to UK economy as deadline looms in EU trade talks

Follow events as they happened in Westminster and beyond

Justice Secretary Robert Buckland says he's confident a hard border can be avoided in Ireland

The Bank of England has said it would pump £150bn into the UK economy and warned that even with a trade deal the lack of preparedness for Brexit would cut 1 per cent from GDP in the first quarter of 2021.

Its Monetary Policy Committee (MPC) based its assessment on the UK striking a Canada-style free trade deal, the prime minister's preferred outcome in the talks with the EU.

With the clock running down before the UK leaves the single market and customs union at the end of the year, significant gaps remained between the two sides in post-Brexit trade negotiations.

The EU’s chief negotiator Michel Barnier said there were still "very serious divergences" after two weeks of intensive Brexit discussions broke up without agreement on Wednesday evening. His UK counterpart David Frost said that they were still working to “find solutions that fully respect UK sovereignty.”

Talks were set to resume on Sunday but major sticking points remained on the “level playing field” regulations, fisheries and a dispute-settling mechanism.

Away from Brexit, Boris Johnson also came under fire from former cabinet minister Rory Stewart, who branded the prime minister an “amoral character” and “the most accomplished liar in public life”.

Key Points

• UK seeks to reassure Biden over Irish border
• Bank of England warns of Brexit hit to UK economy in 2021
• Brexit trade talks ‘still face too many difficulties’
• Buckland ‘cautiously optimistic’ about deal with EU
• Boris Johnson branded ‘most accomplished liar’ by former minister

[5 November 2020 15:21 · Peter Stubley]

‘Temperature of terror threat rising’

The UK’s security minister has warned the “temperature of the terror threat in Europe is rising” following a spate of attacks in France and Austria.

James Brokenshire told the House of Commons that intelligence agencies assessed the threat of attacks in Britain as highly likely.

Here’s security correspondent Lizzie Dearden with more details:

[5 November 2020 15:05 · Peter Stubley]

Raab calls for fresh presidential elections… in Belarus

Foreign secretary Dominic Raab has called for fresh presidential elections in Belarus after an independent report found Alexander Lukashenko’s victory was “falsified”.

He said: "We pushed for this independent investigation and it has exposed the fraud at the heart of the Presidential elections and the despicable actions taken by Lukashenko’s regime to suppress the Belarusian people.

“New elections which are free and fair must now be organised, and those responsible for the violence against demonstrators held to account.”

The UK has already imposed landmark sanctions on president Alexander Lukashenko, his son and senior figures in the Belarusian government under the UK’s new human rights sanctions regime in response to the torture and mistreatment of hundreds of peaceful protestors in custody.

Mr Lukashenko won the election in August with more than 80 per cent of the vote.

[5 November 2020 14:49 · Peter Stubley]

Minister calls for ‘smooth transfer of power’ in US

Justice secretary Robert Buckland risked provoking a diplomatic row after he said he hoped that “the transfer of power, the change to a new administration can be as smooth as possible” after the US election.

However Downing Street brushed off suggestions that the justice secretary was taking sides. Mr Johnson’s official spokesman said: “If you look at the quote, he was very clear that what we want is for the process to go smoothly, whichever candidate wins.”

[5 November 2020 14:35 · Peter Stubley]

UK accused of ‘blocking progress’ over Brexit talks

Michel Barnier gave EU representatives a gloomy assessment of the chances of a UK-EU trade deal yesterday, according to minutes of the meeting seen by Sky News.

The EU’s chief Brexit negotiator said that the level playing field issue “seriously throws the chances of an agreement into doubt” and that the UK "seems to have blocked any progress over the last two weeks", it is claimed.

No agreement has been reached on fisheries either, despite hopes for a compromise solution.

Mr Barnier is reported as saying that he still thought that a deal "was possible", but that British negotiators "are trying to apply time pressure".

[5 November 2020 14:17 · Peter Stubley]

Furlough extension ‘not related to Brexit disruption’, says No10

Downing Street insisted the extension of the furlough scheme into next year was not related to the potential economic disruption caused by the end of the Brexit transition period.

Boris Johnson's official spokesman said: "That is absolutely not the case. The announcements made by the chancellor today is part of the government's ongoing support for businesses affected by coronavirus."

He also rejected as "simply untrue" suggestions that it was stalling for time in the negotiations until the conclusion of the US electoral process.

"We have said on a number of occasions that time is in short supply and we really need to be making more progress in bridging the gaps which remain between the UK and the EU," the spokesman said.

"In terms of the future, it's always been our position that we would rather leave with a free trade agreement but the prime minister continues to hold the view that we will prosper whether we leave with a Canada-style deal or on Australian-style terms."

The reference to “Australian-style terms” is Boris Johnson’s preferred term for "no deal"

[5 November 2020 13:57 · Peter Stubley]

No10 ‘confident’ of strong relationship with US if Biden wins

Downing Street said it was too early to speculate on the outcome of the US election, in response to questions on whether ministers were already reaching out to the Biden camp.

"What we are doing at the moment is allowing the US electoral process time to reach a conclusion," the prime minister's official spokesman said.

"I don't think you would expect us to speculate on the outcome at this stage.

"The US is our closest ally and we are absolutely confident that the relationship will go from strength to strength whichever candidate wins the election."

Here’s Jon Stone’s analysis of what the eventual result could mean for the UK and Brexit:

[5 November 2020 13:43 · Peter Stubley]

EU trade deal ‘still possible’

Boris Johnson’s spokesman has said that a trade deal with the European Union is still possible but the two sides need to make more progress to close the gaps in their negotiating positions.

"I think a deal is still possible and as (Britain's chief negotiator) David (Frost) set out last night that we'll continue to work to find solutions that fully respect UK sovereignty but while progress was made, wide divergences remain on some core issues," the spokesman told reporters at the Downing Street lobby briefing.

[5 November 2020 13:26 · Peter Stubley]

Is furlough extension a Brexit safety net?

The extension of the furlough scheme into March has prompted speculation that the government are preparing for a no-deal Brexit, or at least a period of Brexit chaos after 1 January.

However economics professor Jonathan Portes isn’t convinced.

[5 November 2020 13:10 · Peter Stubley]

Back to events over the pond…

With a Democratic victory looking increasingly likely in the US, justice minister Robert Buckland moved to placate Joe Biden over the question of Brexit and Ireland today.

The Democrat has blasted Boris Johnson's policy on the Irish border, warning that "any trade deal between the US and UK must be contingent upon respect for the agreement and preventing the return of a hard border".

Jon Stone has the full story:

[5 November 2020 12:49 · Zoe Tidman]

Rishi Sunak also announced other changes today, including: