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

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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 08:18 · Peter Stubley]

Bank of England pumps £150bn into economy

The Bank of England has announced it will pump an additional £150bn into the economy as a second national lockdown begins.

In its latest report on the UK economic outlook, the Bank’s Monetary Policy Committee warned that a range of indicators suggest that consumer spending has softened, firms’ investment intentions “remained weak” and unemployment has increased.

[5 November 2020 08:06 · Peter Stubley]

Buckland ‘cautiously optimistic’ about Brexit trade deal

Justice secretary Robert Buckland told Sky News this morning that he was still “cautiously optimistic” about a deal being reached with the EU.

“Both sides are negotiating hard, there is still more work to be don, but the fact both sides are moving very swiftly to carry on the detail of negotiations is a significant sign,” he said.

“We have to prepare for all contingencies, I remain cautiously optimistic with the hard work that is being done that we will reach an agreement.”

Mr Buckland was also questioned about the prospect of a US trade deal given that Joe Biden has expressed concern about any threat to the Good Friday agreement in the event of a no-deal Brexit hard border between Ireland and Northern Ireland.

He said: “I believe that the agreements that we reached last year go in very large measure to avoid that scenario. We have moved a long way from the drama of late last year and we are now degree or depth of any future relationship rather than the fundamental principles.”

The justice secretary - like Boris Johnson and Dominic Raab before him - refused to be drawn on Donald Trump’s allegations of fraud in the US election.

He said: “Any allegations about the vote process are concerning but there is a legal route that can be taken… we hope that any result will be swift and soon for the interest of the American people and the world.”

[5 November 2020 07:55 · Peter Stubley]

Here’s how the UK and EU negotiators saw the situation yesterday evening.

[5 November 2020 07:50 · Peter Stubley]

Brexit talks still face 'too many difficulties’

The latest news from the Brexit trade talks came last night as the EU and UK negotiators Michel Barnier and David Frost revealed that agreement was still beyond reach after two weeks of intensive discussions.

Mr Barnier said that “very serious divergences remain” while Lord Frost said he was continuing to try to find “solutions that fully respect UK sovereignty”.

Time is now running out, as an agreement has to be reached within weeks if a deal is to be ratified by the end of the year.

[5 November 2020 07:42 · Peter Stubley]

Good morning and welcome to The Independent’s live coverage of UK politics today.