Closed Brexit: EU leaders approve Brexit deal as Boris Johnson looks to parliament — as it happened

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Live coverage of Thursday’s pivotal EU summit.


An early start…

It did not take long for the Brexit festivities to kick off today. The DUP has dealt Boris Johnson a serious blow by rejecting his revised deal as it stands. Pound traders are displeased.

We’ll be covering all the developments in real time throughout the day. Follow along right here and let us know what you think in the comments section.


DUP stalls Brexit talks over Northern Ireland

By Laura Hughes, the FT’s political correspondent

Boris Johnson’s hopes of securing a Brexit deal were dealt a major blow on Thursday after Northern Ireland’s Democratic Unionist party said they could not support the revised deal as it stands.

The prime minister needs the support of the DUP to be confident of winning a parliamentary vote on a new Brexit agreement.

In a statement, the party’s leader Arlene Foster and deputy Nigel Dodds said that “as things stand, we could not support what is being suggested on customs and consent issues and there is a lack of clarity on VAT”.

The DUP have insisted that any new deal has to be approved by the Stormont assembly with cross-community support — the idea enshrined in the Good Friday peace agreement that sensitive issues must be passed by both nationalist and unionist communities.

This would amount to a veto for the DUP, something that Dublin — and therefore the EU — will not accept.

The party said in the early hours on Thursday morning: “We will continue to work with the government to try and get a sensible deal that works for Northern Ireland and protects the economic and constitutional integrity of the United Kingdom.”


Sterling sinks as DUP fail to support Johnson’s Brexit deal

The pound slipped on Thursday morning in response to objections from Northern Ireland’s Democratic Unionist Party to the latest Brexit deal proposal following a night of negotiations in Brussels.

Sterling fell 0.6 per cent versus the euro to 86.75 pence, and 0.6 per cent against the US dollar to $1.2754 ahead of the prime minister resuming talks with the EU later today.


Full text: Arlene Foster’s statement on Brexit


What happened overnight

A summary of developments…

Brexit talks continued on Wednesday evening as the UK prime minister Boris Johnson sought to finalise an agreement with EU negotiators in Brussels.

In Brussels, both sides managed to resolve their differences on a number of key issues related to arrangements at the Irish border after Brexit, including customs rules and Northern Ireland’s contribution and authority over such arrangements.

In an evening briefing, Michel Barnier, the EU’s chief Brexit negotiator, told diplomats from the 27 other EU member states that the two sides had made “substantial progress”. As Europe woke one key sticking point was how to prevent fraud involving value added tax.

On Thursday morning the DUP said it could not support customs terms in Boris Johnson’s deal but reaffirmed its commitment with the prime minister to get a “sensible agreement” finalised.

One EU diplomat said there was “genuine enthusiasm” in Brussels for securing a deal but that the EU27 wanted to be certain that the DUP was on board and that Mr Johnson could pass any deal in the Commons.

Hilary Benn, the Labour MP behind legislation aimed at preventing a no-deal Brexit on Halloween, said MPs could use the Commons sitting on Saturday to try to attach a confirmatory referendum to any revised withdrawal agreement.


‘Hard work and pragmatism’ needed, says UK housing minister

The “possibility” of a deal exists but it demands “more hard work and more pragmatism on all sides”, Robert Jenrick, the UK housing secretary, told Radio 4′s Today programme, writes Laura Hughes in London.

Mr Jenrick said early Thursday it was a “very sensitive moment” in the negotiations.

We now need to go back and see what more we can do to persuade each side so we can get this done. It would be a huge missed opportunity to miss this chance to get Brexit over the line and to move on with the life of the country.

Movements and compromises have been required, but we are close to an agreement.

The crucial question, Mr Jenrick told BBC Breakfast, is whether the DUP will engage with further discussions with Downing Street today.

I don’t know the exact arrangements for the next few hours, but be assured the prime minister and his team are in intensive negotiations with all parties, including with the DUP.

We want to provide sufficient comfort for the DUP and unionists in Northern Ireland to feel that the arrangements we would put in place with this deal are sufficient to give them comfort to support it.

We know there are clearly concerns on the part of the DUP and we want to try and work through these productively in the hours to come.

All sides in this do want to secure an orderly exit from the EU, and I think one is in sight, although there is clearly very significant issues to be hammered out.

Downing Street said Boris Johnson had spoken to Jean-Claude Juncker this morning as part of the discussions on securing a Brexit deal.


Further delays loom over Brexit talks

UK-EU talks broke up at 2am last night in Brussels as both sides tried to finish a legal text which has an outstanding issue on VAT rules, writes the FT’s Brussels correspondent Mehreen Khan.

But after the DUP rejected the proposal this morning, the two sides are no longer in formal negotiations. Instead they are “keeping in touch”. “This is not a done deal” says a UK official.

EU27 ambassadors are due to receive a first draft of a new legal text this morning, their first chance to see the agreement before leaders arrive for a summit from around 2pm CET.

The bad signals from Belfast, however, are likely to mean a substantial delay. One senior diplomat says they have “no news” on the text or the state of talks.


Article 50 extension on its way, suggests ING

The best we may be able to hope for today is “political agreement” by EU leaders on the outlines of a revised deal, ING analysts say in a note to investors, as no final legal text is in place and with EU leaders due to meet soon.

One way or another, we suspect this means an Article 50 extension is coming

James Smith, ING’s developed markets economist, wrote:

It’s very unlikely the UK will have left the EU at the end of October. Even if a deal is approved this month, the full ratification process in the UK parliament will take longer.

We also know that if the DUP doesn’t go for it, then it’s likely that neither will many of the hardline pro-Brexit Conservative MPs who’ve rejected the deal in the past.

Hopes that some Labour MPs may come on board are also fading, and there are also question marks over some of the more pro-EU Conservatives who voted for Theresa May’s deal, but may be less inclined to support this one. Former Chancellor Philip Hammond is one such example.


Merkel says talks are ‘on a better path than before’ but hurdles remain

There’s been “clear movement” on Brexit in recent days and the UK has shown “willingness to act”, said Germany’s chancellor Angela Merkel in the Bundestag on Thursday. She added though that Germany was prepared for a no-deal Brexit.

We are on a better path than before but…we are not yet at our final destination.

Ms Merkel said a good solution will be like “squaring the circle”.

She warned that there have been many times in the past when they seemed close to a solution, only to see it all fall apart.

I don’t know how tomorrow’s EU summit will end. But I can tell you that we can’t allow a situation where a hard border on the island of Ireland allows hatred and violence to flare up again.

She said Germany would seek to ensure that the Good Friday Agreement and the principles of the single market are not endangered or called into question.

On the question of customs, she said:

We need practicable, realistic solutions for how the new customs controls in Northern Ireland will actually be implemented.

She said that a deal was possible and “if necessary we can also meet again at a special summit”.


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Legal text elusive even as summit looms hours away

Mehreen Khan reports from Brussels:

A senior EU official has said there is still no legal draft Brexit text from the two negotiating sides this morning. An EU leaders summit is only five hours away.

Boris Johnson is due to attend and give a short intervention at the summit’s first session – he will then be asked to leave as the EU27 hold talks. But without a text emerging, there is almost no chance that leaders will approve a draft treaty.

“Maybe we’ll have a deal, or maybe not” said the official.


Labour suggests it could back referendum in event of deal

The opposition Labour party has suggested it could back an amendment calling for a confirmatory referendum on Boris Johnson’s deal if it looks set to pass in the House of Commons, writes Laura Hughes.

Tony Lloyd, the shadow Northern Ireland secretary, told BBC Radio 4′s Today programme:

We have to be very careful. Let’s just see what this deal is. Prime Minister Johnson has not yet chosen to show the British public in general what the deal consists of.

If the PM can push through his deal, of course Jeremy Corbyn would accept that the best way through, rather than letting it slide through unchecked, it should be put to the test of public opinion.


Guide to clause on Northern Ireland

Brexit negotiators hammered out a complex system to give the Northern Ireland assembly a say on the new customs and regulatory arrangements once the UK leaves the EU, but these have run up against DUP opposition, writes Sam Fleming in Brussels.

Here is how the system would work.

– The assembly would have the opportunity to hold a simple majority vote on continuing the customs and regulatory arrangements four years after the end of the UK’s post-Brexit transition period. This would effectively prevent a DUP veto.
– If Northern Ireland were to vote to junk the system, a two-year cooling-off period would ensue.
– If the assembly decided to continue with the arrangements, a further opportunity to vote would arise four years later.
– There would then be two voting thresholds. A simple majority vote would keep the system in place for four years. However a weighted majority in favour, which means support from both nationalist and unionist communities, would keep it in place for eight years.
– If the Stormont assembly is not sitting, or if votes are not held, the arrangements would stay in place automatically.


EU leaders show ‘zen’ as they await legal text, says official

A senior EU official said that governments were “waiting” to see a legal text of what has been agreed during the EU-UK negotiations, writes Jim Brunsden in Brussels.

National capitals have still not received documents from EU chief negotiator Michel Barnier, the official said. Negotiators are seeking to keep the documents under wraps until they have completed their work.

EU27 leaders are showing “patience, zen”, the official said. But he warned that this could change in the coming hours, jeopardising the chance that the EU will be able to give its approval to any deal at this week’s summit.

“So far we have seen a lot of patience from the capitals,” he said.

I am afraid that at a certain point…somebody will say that, before we approve the text of an international treaty, it has to be read.

This is an ancient tradition and we are not ready to change it.

If no legal text is ready to be presented at the summit then the question of an extension would be ‘very much present in the discussions’, the official added.


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EU and UK reach draft agreement on Brexit deal

EU and UK negotiators have reached a draft agreement on a new Brexit deal, writes Sam Fleming in Brussels.

The text of the deal has yet to be shared with national capitals. It comes as Boris Johnson, the UK prime minister, struggles to win political backing for the accord from the Democratic Unionist party.

Mr Johnson is due to attend a summit of leaders in Brussels later today.

The draft agreement addresses how to avoid a hard border on the island of Ireland after Brexit, tackling issues such as customs controls and consent for the Northern Ireland Assembly.


Sterling surges as Brexit agreement announced

The pound leapt past $1.29 on the news of an agreed Brexit deal between Brussels and London, writes Tommy Stubbington in London.

The UK currency, which was recently trading at $1.2933, rose more than 1 per cent against the dollar to its highest since May.

UK government bonds, traditionally a haven for investors, sold off, pushing the 10-year yield up 5 basis points to 0.77 per cent. The yield on the 10-year German Bund rose 5 basis points to minus 0.343 per cent.


DUP still not on board with deal agreed by UK and EU

DUP officials have said their statement from this morning still stands, reports the FT’s Laura Hughes.

In a statement, the party’s leader Arlene Foster and deputy Nigel Dodds said earlier on Thursday that “as things stand, we could not support what is being suggested on customs and consent issues and there is a lack of clarity on VAT”.

The rejection from a party that props up Boris Johnson’s minority government represents a major stumbling block for pushing the revised deal through parliament.


‘We have a deal,’ say Juncker and Johnson

The negotiators reached an agreement on a revised protocol on Ireland/Northern Ireland border, wrote Jean-Claude Juncker to Donald Tusk, president of the European Council, as he endorses the deal.

“Where there is a will, there is a deal,” Mr Juncker, president of the European Commission, tweeted. “We have one!”

“I recommend that EUCO endorses this deal,” Mr Juncker added.

UK prime minister Boris Johnson said: “We’ve got a great new deal that takes back control.”

And here’s the letter from Mr Juncker to Mr Tusk:


Johnson declares agreed deal ‘takes back control’

Boris Johnson, UK prime minister, urges parliament to “get Brexit done on Saturday” in this tweet:


Support grows for confirmatory vote

Speculation is now turning to Saturday’s House of Commons’ sitting and whether the Labour party will try to force a second referendum on Brexit, despite the reluctance of leader Jeremy Corbyn to go down that route, writes Jim Pickard.

Ben Bradshaw, a pro-EU Labour MP, says that an amendment on a “People’s Vote” will be moved and subsequently supported by many Labour MPs “whether we are whipped or not”.

Labour’s formal position is to back a confirmatory referendum on any Tory Brexit plan and then campaign for Remain afterwards, as Mr Bradshaw points out. Keir Starmer, shadow Brexit secretary, said as much in a speech on Saturday. But in recent weeks Jeremy Corbyn, the Labour leader, has, by contrast, repeatedly argued that his priority is to try to force an election in which Labour would campaign to renegotiate a better deal.


Draft deal ensures DUP cannot veto customs rules without Stormont majority

Key points from a draft version of the new Brexit agreement include the consent mechanism for Northern Ireland, writes Mehreen Khan in Brussels.

This ensures that the Democratic Unionist party cannot veto the new customs and regulatory rules as they will not have a simple majority in Stormont, the seat of the Northern Ireland assembly.

The UK has kept promises to maintain a high level playing field in EU standards, something UK prime minister Boris Johnson wanted to scrap.

There is no DUP veto possible within the first eight years of the new arrangements taking affect.


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Corbyn says Labour to back referendum on Johnson’s ‘sell out deal’

Jeremy Corbyn has just announced that his party will back a second referendum on the Johnson deal, putting to an end days of speculation, reports Jim Pickard.

“From what we know, it seems the prime minister has negotiated an even worse deal than Theresa May’s, which was overwhelmingly rejected,” he said. “These proposals risk triggering a race to the bottom on rights and protections: putting food safety at risk, cutting environmental standards and workers’ rights, and opening up our NHS to a takeover by US private corporations.

“This sell out deal won’t bring the country together and should be rejected. The best way to get Brexit sorted is to give the people the final say in a public vote.”


Barnier on Brexit: ‘A school of patience’

“Brexit is a school of patience,” said Michel Barnier, the EU’s Brexit negotiator, as he opened his press conference on Thursday, writes Mehreen Khan in Brussels.

The one sticking point between the two teams — VAT rules for Northern Ireland — has now been solved, he said.

Confirming that there is no more backstop, he said the consent mechanisms for the new Irish protocol are a “democratic cornerstone”, as the arrangement is no longer to be replaced by a subsequent agreement by the UK and EU, as per Theresa May’s deal.

Mr Barnier remains “cautious” as to whether the deal will pass in the House of Commons but Boris Johnson, UK prime minister, has told his EU counterparts he is “confident” he can get the deal through his parliament, Mr Barnier said.

Mr Barnier added:

I have done my work, our team has done their work.

I fully respect the procedures and the debate. I never intended for us to judge the [House of Commons'] role.

Thursday’s deal, which Jean-Claude Juncker, president of the European Commission, and Mr Johnson signed off during a phone call this morning, “brings legal certainty everywhere where the separation of Brexit brings uncertainty, above all for the citizens”, Mr Barnier said, reports Jim Brunsden.

Mr Juncker and Mr Johnson will present the deal to EU leaders later today, the EU’s chief negotiator said.


European leaders respond to news of a Brexit deal

Javier Espinoza, EU correspondent in Brussels, reports:

Northern Ireland: Micheál Martin of Fianna Fáil, said:

What I would say to the DUP is [that] in no way does this arrangement undermine the constitutional status of Northern Ireland.

Asked if the Brexit deal secured adequate protection of the Irish peace process, Mr Martin said: “I think so. Obviously there is still work to be done in terms of that. The most important being the restoration of the assembly and the executive…It’s now absolutely imperative that it gets restored.”

Luxembourg: Xavier Bettel, prime minister, said:

I’m the one who always wanted to have a deal. No deal is bad for all of us. So a deal is good.”

Netherlands: Mark Rutte, the Dutch prime minister, said: “We have to study the details but in itself [it is] very encouraging,” pointing to a stack of papers in his hand. He refused to say whether his country would back the proposed deal at this stage.

Belgium: Charles Michel, prime minister, said:

We will see in the next hours if it is possible to confirm this deal. But it’s certainly a positive signal, an optimistic signal. And after the last three years it was important to take a step, and a step in the [right] direction.


‘Fight is far from over,’ says Lib Dem’s Swinson

Jo Swinson, leader of the Liberal Democrats, after news broke that a deal has been agreed between the UK and the EU said:

The fight to stop Brexit is far from over. Boris Johnson’s deal would be bad for our economy, bad for our public services, and bad for our environment.

The next few days will set the direction of our country for generations, and I am more determined than ever to stop Brexit.

When this deal comes to parliament we will use every possible opportunity to give the public a people’s vote on the Brexit deal that includes the option to remain in the EU.

Laura Hughes in London reports


ERG-aligned Leaver shows signs of softening


EU and UK reach Brexit deal – latest developments

Here’s the latest on a day of fast moving developments in Brussels and London:

• The EU and UK negotiating teams have reached a draft agreement on a new Brexit deal after days of intensive talks in Brussels.

• UK prime minister Boris Johnson said the deal ‘takes back control’, while EU Brexit negotiator Michel Barnier said it “brings legal certainty everywhere.”

• Sterling rallied following news of the deal but has since given back some of its gains to trade 0.4 per cent higher at $1.2885.

• There is still serious uncertainty over whether the deal will pass the UK parliament.

• In a major development, Labour have said they will back a second referendum on the Johnson deal.

• The DUP, which props up Johnson’s minority government in Westminster, is still not on board with the deal.

• The uncertainty sets up a critical Saturday in the UK parliament, which will sit in a historic weekend session.

• Mr Johnson urged MPs to back the deal, and “get Brexit done,” although even if the deal goes through the UK will still face years dealing with its future relationship with the EU.


Johnson ‘reasonably optimistic’ of Commons support, Macron says

Emmanuel Macron, president of France, said Boris Johnson, UK prime minister, has indicated he is “reasonably optimistic” he will win support for his deal in the House of Commons, writes Mehreen Khan.

Mr Johnson “wants to get a majority”, said President Macron, speaking ahead of today’s leaders’ summit.


Downing Street: Deal ‘protects the UK’s union’

The prime minister’s spokeswoman has said the deal agreed with the European Union “protects the union” and will be put to a vote in parliament on Saturday, Laura Hughes writes.

She said the deal “removes the backstop, deals with unique circumstances on the island of Ireland and allows the UK to leave the EU in an orderly way on 31st October.”

Questioned on whether legislation could be passed by the end of the month, the spokeswomen said: “The public would expect if the deal is passed, for MPs to do everything they can to pass it on time and yes we are confident that we can do that.”


Labour MPs: Concessions needed on the ‘level playing field

Until today the number of Labour MPs talking to Number 10 about supporting a deal has been only in the single figures – around eight or nine. Many went cold on the idea of supporting the government after its amended protocol scrapped Theresa May’s previous “extensive level playing field arrangements” on employment, consumer rights and the environment.

Stephen Kinnock, one of the figures in the cross-party group for a deal, said the change had been “very unhelpful”. “The level playing field issue has rung alarm bells among Labour MPs,” he said. “Manufacturing industries are very concerned about this.”

But Mr Johnson appears to have backtracked, offering up a new statement – in the political declaration – where he promises to uphold the “common high standards” between the UK and EU on “state aid, competition, social and employment.”

Now the question is whether that shift will give more Labour MPs the political cover they need to vote for a Tory deal.

But some sceptics will sense déjà vu. Earlier this year there were up to 40 Labour MPs – mostly in Leave seats – mulling backing Mrs May’s deal. Even on the third attempt only five of them did so.


Expectation and relief inside the EU

Michael Peel has the latest reaction from Brussels:

EU ambassadors are due to meet shortly to discuss the new deal ahead of the leaders’ meeting this afternoon – and the mood music is of expectation and relief.

One diplomat said wryly: “I am sure it will be approved with a standing ovation”. Another agreed it “looks like” the the leaders could back the agreement in principle today.


Reminder: ‘Political issues over Brexit are still unresolved’

Lest you forget amid the excitement in Brussels and Westminster … there are still many political issues that present significant hurdles to Boris Johnson.

Marija Veitmane, senior strategist, multi-asset at State Street Global Markets, points out that the deal agreed between the UK and EU on Thursday is “just a step in Brexit resolution.”

She says:

We still see a lot of challenges ahead. The economic rationale for both sides to reach the deal has been present for a long-time, but unfortunately politics has been standing in the way. Those issues are yet to be resolved.

From a financial market point of view, the resolution of Brexit impasse would be extremely positive as it removes a large headwind for both UK and European economies.

However, the immediate reaction to the news suggest that the market needs confirmation that the agreed deal can go through the Parliament before rallying strongly.


Rees Mogg urges DUP to back deal

Jacob Rees-Mogg, a senior minister and leading Brexiter, has urged the DUP to back the new Brexit agreement.

“It is a really good, exciting deal,” he said in parliament.

It is a really exciting day today in British politics, all Eurosceptics, all my friends who sit where I used to sit, can rally round this great deal, and I hope my friends in the DUP will also find that what it does for the whole of the United Kingdom is something over which they can have comfort and support.

The key Brexit unknown is now whether the government has the numbers to get this deal through the commons, and the support of the ERG group of Brexit backers will be key.

Mr Rees-Mogg has previously urged hardline Eurosceptics to compromise and back any fresh deal in order to ensure the UK leaves the EU.


Emoticon Johnson to urge EU leaders not to offer extensions

At tonight’s meeting of EU leaders, Boris Johnson will ask leaders not to offer any further Brexit extensions, in an effort to force the choice facing MPs as his deal vs no deal, Sebastian Payne writes.

A senior No10 official told the FT: “the prime minister will tell EU leaders that it’s this deal or no deal – but no delays. He will not ask for an extension and will not accept one if offered.”

This may also be an effort to dodge the Benn Act, which forces Mr Johnson to request another Brexit extension if no Brexit deal passes on Saturday.


Brexit party supports further delay to EU exit

Writes Sebastian Payne, the FT’s Whitehall correspondent

The Brexit party is, unsurprisingly, not supporting Mr Johnson’s new deal. Nigel Farage has told the BBC: “It’s just not Brexit…it’s a new EU treaty that binds us into so many other commitments”. The Brexit party’s leader said that instead “the best way out of this would be simply to have a clean Brexit.”

Mr Farage added that instead of passing this deal, he would prefer another delay to Brexit instead of this deal passing parliament:

“I’d very much like us to leave on the October 31 but I understand that the Benn Act has been passed and that makes it impossible. But would I rather accept a new European treaty that is frankly very bad for us? Or would I prefer for us to have an extension and a general election? I would always prefer the latter option.”


Full text: The revised Brexit deal

Some of you have asked in the comments section for the full text of the revised Brexit deal. We’ve just uploaded it onto FT.com, you can read it here. Enjoy!


ING: Limited upside for the pound from here

Sterling has given back some of its initial rush of gains following news of the deal. It was recently 0.3 per cent higher and back below $1.29 as traders weigh the chances of the deal passing the British parliament.

This from Petr Krpata, ING foreign exchange strategist:

“Although the UK and the EU have reached a Brexit deal, it remains uncertain if it can pass in parliament, largely due to the position of the DUP. This, coupled with GBP already trading with a premium against EUR, suggests a limited upside to GBP from here. But we can conclude that the odds of a hard Brexit has decreased and so has the downside to GBP.”


Legal challenges lie ahead for PM

If Boris Johnson fails to get his deal through parliament, he is set to face legal challenges to ensure he complies with the Benn Act, writes Jane Croft
law courts correspondent.

Liberty, the human rights group, will be in the Court of Appeal on Friday applying for a court order which aims to ensure that Boris Johnson obeys the European Union (Withdrawal) (No2) Act.

The so-called Benn Act states that the UK government must ask the EU for an extension if MPs do not approve a Brexit deal by October 19 this year.

Liberty says its legal challenge is about ensuring that the government acts within the law and it wants the courts to make it crystal clear what the prime minister can and cannot do within the Benn Act.

Liberty applied for permission for judicial review last month but was blocked by the High Court which said its case was “entirely hypothetical” at that time. It is now renewing its application before the Court of Appeal on Friday.

Legal action is also afoot in Scotland. Scotland’s highest court has already suspended consideration of a legal challenge intended to force Mr Johnson to abide by the Benn Act until next week.

The Inner House of Edinburgh’s Court of Session held off ruling on a case brought by Dale Vince, an anti-Brexit campaigner, barrister Jolyon Maugham and Scottish National party MP Joanna Cherry until October 21.


UK government denies ignoring DUP’s concerns

Sebastian Payne and Laura Hughes:

British government officials are pushing back on the idea that the Democractic Unionist party have been thrown under a bus as a result of this deal.

According to one insider Boris Johnson would still “love” to have the DUP on board, noting that Downing Street has worked “painstakingly” to get a deal with them.

The officials added that the Johnson government understands their concerns as remains in “listening mode” but also “believes in the deal.”

Michael Gove, the UK cabinet office minister, was asked whether the DUP’s wishes were ignored.

He told Sky News: “Absolutely not. This is a great deal.” He said the whole of the UK, including Northern Ireland, can leave the EU together.

“The future of Northern Ireland will be decided by the people of Northern Ireland”, he added.

Questioned on what Boris Johnson will do if deal does not pass on Saturday, he replied: “We don’t contemplate defeat”.


Constâncio, former ECB vice-president: Nothing new in this proposal

Vítor Constâncio, the Portuguese economist and European Central Bank vice-president until last year, has some interesting thoughts on the proposed deal.

He said the agreement largely follows an old EU proposal to put a border in the Irish sea, which was rejected by the then UK government “as it split the UK sacrossant unity”’

Johnson did not invent this solution to get rid of the backstop, it was on offer long before the WA and that is why the EU reopened the negotiations. In spite of it, the Tory press is praising Johnson for accepting something that they opposed in the past. Such is politics.

He thinks this morning’s events mean Brexit will now happen:


Ireland’s Coveney calls Brexit pact a ‘big step forward’

The Brexit agreement is a “big step forward”, said Simon Coveney, Irish deputy premier, noting there will be no border or customs checks after Brexit, reports Arthur Beesley in Dublin.

The deal will protect peace and trade in Ireland, he told parliament in Dublin.

It is a new deal. It is a deal that recognises all of the issues that we have been raising for the last three years. This is a deal that is worth supporting because it protects the core Irish interests.


Emoticon DUP will not support the deal

Northern Ireland’s DUP will not back the new Brexit deal, a major development which hit the pound and has dealt a significant blow to Boris Johnson’s chances of pushing the agreement through parliament.

The DUP accused the Johnson government of “driving a coach and horses” through the Belfast Agreement, said the proposals “undermine the integrity of the Union.”

One of the DUP’s key problems has been around domestic arrangements for approving the deal in Northern Ireland. Here, they said:

While some progress has been made in recognising the issue of consent, the elected representatives of Northern Ireland will have no say on whether Northern Ireland should enter these arrangements.

The Government has departed from the principle that these arrangements must be subject to the consent of both unionists and nationalists in Northern Ireland. These arrangements would be subject to a rolling review but again the principles of the Belfast Agreement on consent have been abandoned in favour of majority rule on this single issue alone.

These arrangements will become the settled position in these areas for Northern Ireland. This drives a coach and horses through the professed sanctity of the Belfast Agreement.

Labour have also said they will not support the deal, while it is not yet clear if the hardcore Eurosceptics in the Tory ERG will sign up.


Instant Insight: The Boris Johnson Brexit deal dissected

Robert Shrimsley, the FT editorial director, writes:

Boris Johnson finally has a Brexit withdrawal deal. The legal text has just landed, so any first judgments are contingent upon more rigorous examination of the detail. But here are a few preliminary thoughts.

• The prime minister still has to get this deal through the House of Commons, and the votes are not guaranteed. The Democratic Unionist party has said the doubts it had overnight have not yet been eased. If Mr Johnson is trying to bounce the DUP, he is taking a big risk. The party is known for its intransigence. But DUP opposition goes beyond its 10 votes, since the objections of this handful of MPs may pull some Tory hardliners into voting against the deal. However, there is a desire within the Conservative party to unify around a deal, so Mr Johnson will hope any rebellion stays small scale. He will have to rely on the moderate Tories he expelled from the party and up to 20 Labour MPs ready to back a deal. That is quite a risk. Official Labour opposition to this deal may well whittle that number down. A more realistic number of pro-deal Labour rebels may be closer to single figures.

Read his full Instant Insight here.


Pound slides below $1.28 as DUP delivers blow to Johnson

The news the DUP will not back the new Brexit deal has sent the pound sliding.

It is now lower on the day, having shot higher in an initial burst of euphoria as news of the agreement in Brussels broke this morning.

Sterling was recently 0.2 per cent lower at below $1.28, and has traded in a range of nearly 2 per cent on a volatile day.

Gilts yields have also reversed their earlier rise, with the 10-year trading at 0.69 per cent.


Draft EU communique calls for agreement to be in force on November 1

Mehreen Khan reports from Brussels:

The FT has seen a draft version of the language on Brexit EU leaders will sign off on at today’s summit.

It says the European Council endorses today’s deal and invites the European Parliament to take the steps to “ensure the agreement can enter into force on 1st November 2019 so as to provide for an orderly withdrawal”.

The communique thanks Michel Barnier for his “tireless efforts” as chief negotiator.


Emoticon Johnson and Juncker speaking

Jean-Claude Juncker and Boris Johnson are holding their first joint press statement in Brussels.

Mr Juncker has said there is now “no need for any kind of prolongation” in Brexit talks and thanked the prime minister for his “excellent relationship” in recent weeks.


Emoticon MPs approve Saturday sitting of parliament

MPs have approved a motion for the House of Commons to sit on Saturday in order to scrutinise the new Brexit deal.

MPs voted by 287 to 275 to approve the first Saturday sitting of the House of Commons for the first time since 1982. It is likely to be a decisive moment in the Brexit process as it is still unclear if the government has the votes to pass the deal.


Johnson: Deal delivers ‘real Brexit’

Speaking in Brussels, Boris Johnson said the new deal “representatives a very good deal both for the EU and the UK, it is a reasonable and fair outcome.”

“For us in the UK it means we can deliver a real Brexit that achieves our objectives…the UK leaves whole and entire on October 31st.”

Neither leader took questions from the press following their short statements.


‘Last chance’ and opportunity to ‘limit’ damage, say Poland and Luxembourg

More reaction comes in from EU member states, with Poland calling the agreement “a great success” while Luxembourg’s prime minister says he is “so happy” to have a deal, FT reporters write.

Konrad Szymanski, Poland’s Europe minister, said that the deal was “a great success for both sides”, reports James Shotter in Warsaw.

The UK has guarantees of its sovereignty and territorial integrity. We have guarantees of the integrity of the EU common market. I hope the House of Commons can appreciate it and will open the doors for a good trade deal in the nearest future. It is the last chance for responsible Brexit.

Xavier Bettel, Luxembourg’s prime minister who last month gave an impassioned press conference beside an empty podium intended for the visiting Boris Johnson, said he was “so happy” to have a deal, reports Michael Peel.

“This is a positive way and I really hope we will be able to get a green light from Westminster on Saturday,” Mr Bettel said, referring to the expected British parliamentary vote on the accord.

He added that the debate was no longer about being pro- or anti-Brexit, but about avoiding no-deal.

“No deal is a lose-lose situation,” he told reporters on arrival at the EU summit in Brussels.

A deal is not a win-win situation. But at least we will be able to limit [the damage].


Markets braced for more pound volatility

Investors are positioning for volatility in the currency markets as they gauge the probability of the new Brexit deal passing the UK parliament.

Expectations for sterling volatility over the next week have jumped today and have risen to their highest level since the aftermath of the Brexit vote in 2016, as traders moved into contracts in the options market that pay out if the currency fluctuates.


Deal is ‘good’ and allows UK to leave in ‘orderly fashion’, says Ireland

Leo Varadkar, Ireland’s prime minister, said he would recommend that the European Council endorse the deal, reports Michael Peel.

It’s a good agreement that allows the United Kingdom to leave the European Union in an orderly fashion.

The deal met Ireland’s tests of avoiding a hard border with Northern Ireland, he told reporters on arrival at the EU summit, protecting the all-Ireland economy and preserving the Good Friday Agreement.

He added that the much argued-over Irish border backstop had been replaced by a “unique solution” for Northern Ireland that “takes account of the democratic wishes of the people”.

It’s always the case that a compromise never has one father. We were all involved in making those compromises – Mr Johnson, the Irish government and also the European Union as well.


Deal is ‘good news’, says an ‘optimistic’ Merkel

Angela Merkel, chancellor of Germany, remains cautious but says an agreement is “good news”, adding that it’s important that the Irish taoiseach is happy with the revised deal, reports Guy Chazan in Berlin.

“We are checking [the deal] at the moment and will form an opinion,” Ms Merkel said on her arrival at the summit in Brussels.

Of course we know large parts of the agreement already, and to that extent, I say it is good news. Of course the European Parliament and the British parliament must agree to it. But subject to their agreement we can say here an agreement has been negotiated which, in an extremely difficult situation, opens up the possibility of preserving the integrity of the EU single market and at the same time maintaining the Good Friday Agreement.

For me it’s a very important sign that the Irish prime minister is happy with (it).

She thanked Michel Barnier, the EU’s chief negotiator, and his team.

We have shown that the EU27 have stuck together. I am feeling quite optimistic.


Scotland’s fishermen see ‘sea of opportunity’ from agreed Brexit deal

Scottish fishermen welcomed the EU-UK Brexit agreement, which they say provides a “gateway” for Britain to leave the common fisheries policy and become an independent coastal state.

The Scottish Fishermen’s Federation pledged to support the deal brokered on Thursday between the EU and Boris Johnson. The UK parliament is due to vote on the accord in two days’ time.

In tens of marginal seats in Scotland the fishing vote exercises disproportionate influence. Nigel Farage, leader of the Brexit party, has said the “acid test” of any deal will be how it affects Britain’s fishing community.

“More than three years after the referendum, we hope that Saturday marks the turning point when we can move to the next stage – working towards the sea of opportunity that exists outside of the EU’s common fisheries policy, and being able to redress the imbalance where 60 per cent of fish caught in UK waters are not caught by the UK fleet,” said Elspeth Macdonald, chief executive of SFF in a statement.

It is imperative that the implementation period does not extend beyond the end of 2020, and that negotiations on the future free trade agreement between the UK and EU do not make any concessions on access to UK waters.

The British fishing industry represents 0.1 per cent of the economy.

Read more: ‘Double Leavers’ hold the key to the Tories’ Scottish fortunes


Traders take on protection to hedge against sterling drops

Michael MacKenzie, FT market columnist and writer of the Market Forces newsletter, reports:

Positioning flows in currency options shows that traders and others are favouring downside protection against a fall in the pound over the next one and three months. Shifts in the market reflect more buying of put options that become profitable for holders should the spot rate for the pound slide.

Having turned positive a week ago, the one-month risk reversal for sterling has dropped sharply below zero once more over the past 24 hours. Since the June 2016 referendum resulted in a vote for the UK to leave the EU, investors have been bearish on the pound and to such an extent that the cost of buying currency puts has generally been greater than that of calls.

Of note, is how the three-month risk reversal has remained camped in negative territory, highlighting how for all the brimming optimism that drove the pound sharply higher over the past week, doubts have lingered over whether a deal can be passed in British parliament.

Fred Cleary at Pegaus Capital alerted me to this development and he says:

‘The spot move is looking more like a short squeeze (similar to the January move as deal was being agreed and presented for voting) and can only assume there are still lingering concerns over election/no-deal/second referendum.’

Sign up for the Market Forces newsletter by clicking here.


Government faces fresh legal challenge

Jo Maugham, the barrister and anti-Brexit campaigner, has now lodged an urgent new legal challenge in the Scottish courts which he hopes will be heard on Friday, writes Jane Croft.

His petition centres around section 55 of the Taxation (Cross-Border Trade) Act 2018 which states it would be unlawful for the government to enter into arrangements under which Northern Ireland forms part of a separate customs territory to Great Britain.

Mr Maugham is arguing that Boris Johnson’s new deal – which contains special customs arrangements for Northern Ireland – is contrary to section 55. He claims it is not open for the UK to enter into such an agreement unless section 55 is repealed by parliament.

He wants the Scottish Court of Session to grant a court order preventing the government from placing the Withdrawal Agreement before parliament for approval.

Craig Connal, litigation partner at law firm Pinsent Masons, calls the lawsuit a “crucial legal step change in the run up to Saturday’s vote in Parliament” .


EU leaders meet

The EU heads of government have begun their round table at the European Council summit. As ever, they allowed the cameras in for a few moments before the discussions begun.


Senior German lawmaker says British people should have final say on Brexit

Guy Chazan reports from Berlin:

Norbert Röttgen, head of the German Bundestag’s foreign affairs committee and an influential voice on Brexit, has tweeted:

There is a new #BrexitDeal on the table. If that is what both sides want: fine. But my stance hasn’t changed: It should be up to the people to have a final say on #Brexit. A long #extension would leave time for this!


Juncker: ‘No need for any prolongation’

European Commission president Jean-Claude Juncker has been speaking about the possibility of any further Brexit extensions.

Asked whether he would rule out an extension, he said:

I gave a brief doorstep with Boris Johnson.. half an hour ago…and I was ruling out that there will be any prolongation. If we have a deal, we have a deal, and there is no need for any prolongation. That is not only the British view, that is my view as well.

This is potentially significant, as it could help Boris Johnson frame Saturday’s ‘Meaningful Vote 4′ on the Brexit deal as a binary choice between his deal and a no-deal exit.

Still, the decision is for the EU27 leaders, rather than Juncker, and they have shown no inclination to allow a crash out event at any stage over the last three years.

Mr Juncker’s intervention has left us in the bizarre scenario of Nigel Farage backing the Benn Act, which was designed to protect against his desired outcome of a no-deal exit:


Will the deal pass?

Craig Oliver, the former head of communications at Downing Street, thinks Boris Johnson believes he has the numbers to pass this deal through parliament even without the support of the DUP.

He points out that it even if it is defeated it would tee up the Conservatives nicely for a ‘people vs parliament election.’

Mr Oliver also pointed to signs that the Brexit party is gearing up to “cry betrayal and fight hard,” which could prove problematic for the Conservatives in a future election.


The Remainer gameplan

Jim Pickard has intelligence from the second referendum camp:

Remainer MPs are now NOT expected to amend the motion for Johnson’s deal on Saturday.

Instead it depends what happens:

1 – If a deal passes, the opposition will try to amend the withdrawal agreement bill – in the following days – to add a second referendum

2 – If the deal fails, they are likely to use a standing order 24 (a parliamentary device) to seize control of the order paper and attempt to organise a vote on Theresa May’s deal, probably with a second referendum attached.


What will happen to the ex-Tory rebels?

One big question is what will happen to the former Tory MPs who were sacked last month for backing Hilary Benn’s anti-No Deal bill, Jim Pickard writes.

They include big names such as Ken Clarke, Amber Rudd, Rory Stewart and Philip Hammond. Without them Boris Johnson’s government will continue to have a working majority of -42. Will they be brought back on board – and have the whip restored – if they back the deal?

One government figure gives a heavy hint that this could be the case, at least for some of them: “That’s too transactional a way of looking at it….but voting in such a way could be the start of a journey not the end of one.”

Number 10 believes that the pivotal figure is probably Mr Hammond, the former chancellor of the exchequer. If he can be brought on board that could secure the support of all but a handful of those rebels, Downing St believes.


Brexit drama sends sterling on a wild ride

Sterling has been on a roller-coaster ride today, and was recently 0.3 per cent higher against the US dollar at $1.2870.

After an initial bout of enthusiasm when the deal was announced this morning, the uncertainty over whether it can pass parliament has weighed on the currency.

John Wraith, head of UK rates strategy at UBS, said markets are closely watching the arithmetic in the Commons.

“There is a reason why sterling was falling quite fast…it is the incredibly frustrating process which may see us running into a brick wall on Saturday.”

“It is pretty hard to see how the numbers stuck up [without the DUP].”


Starmer outlines Labour’s objections, calls for second referendum

Labour’s Brexit lead Keir Starmer has posted a detailed analysis explaining why the party will not back Mr Johnson’s deal, and called for a confirmatory vote.

He said in a series of tweets:

“It is clear that the Johnson deal is a far worse deal than Theresa May’s deal. It paves the way for a decade of deregulation… Labour will not support a flawed Brexit deal that harms jobs, rights and living standards. This deal will unquestionably do that.”


Emoticon EU leaders approve Brexit deal

From Jim Brunsden in Brussels:

EU leaders have given their approval to Boris Johnson’s new Brexit deal, according to three people briefed on the talks.

Leaders at a summit in Brussels gave their backing to today’s agreement, which requires ratification by the House of Commons and the European Parliament.


EU’s Tusk: Close to the ‘final stretch’

Sam Fleming and Jim Brunsden are in Brussels:

Donald Tusk, the European Council president, said that after endorsing the Brexit agreement the EU was close to the “final stretch”.

Mr Tusk confirmed that EU leaders have endorsed Boris Johnson’s Brexit deal, saying it paved the way for the UK to leave at the end of the month if the accord is ratified in the House of Commons and European Parliament.

“Now we are all waiting for the votes in both parliaments. It looks like we are very close to the final stretch.”

Mr Tusk said the key change in the talks had come with the acceptance by Mr Johnson that customs checks would happen on entry to Northern Ireland, rather than being at the border between Northern Ireland and the Republic.

The deal would allow Europe to avoid the atmosphere of chaos that would accompany a no-deal Brexit, he argued.

The Council wanted the deal to take effect on November 1, but he acknowledged leaders were now waiting for the votes in both the European Parliament and the Westminster Parliament.


Emoticon EU leaders take no position on an extension

EU 27 leaders called on the bloc’s institutions to “take the necessary steps” to ensure the agreement can enter into force on Nov 1, “so as to provide for an orderly withdrawal,” writes Michael Peel in Brussels.

Their agreed conclusions restated the EU’s determination to have “as close as possible a partnership with the United Kingdom”, in line with the accord’s political declaration.

Crucially, the conclusions took no position on whether the UK would be granted an extension of its withdrawal date beyond October 31 if it were to ask for one. This means leaders have kept their options open on a prolongation – in contrast to the opposition expressed earlier by Jean-Claude Juncker, European Commission president.


Tusk: Door is always open

Donald Tusk said that on a personal note he now felt sadness. “In my heart I will always be a Remainer,” he said. “I hope our British friends decide to return one day. Our door will always be open.”

Ireland’s Leo Varadkar said he backed the deal but had “mixed feelings” about today.
“I really regret that the UK is leaving the EU,” he said.

“It’s really like an old friend going on a journey or an adventure without us. We wish them well. There will always be a place for them at the table if they choose to come back.”

He said he “sincerely” hoped the deal would be ratified by the UK and EU parliaments “so we can move on to the next phase of negotiations.”


Tusk: Will consult on extension if needed

Sam Fleming in Brussels writes:

Donald Tusk, the Council president, said that the EU was now prepared for ratification and that “now the ball is in the court of the UK”.

He added that he had no idea what the result of the debate would be in the House of Commons on Saturday. If, however, a request for an extension came from the UK, “I will consult member states to see how to react”.


Johnson looks ahead to UK vote on deal

Mehreen Khan in Brussels writes:

Boris Johnson in Brussels after his summit appearance has urged MPs to read his deal and pass it. He told journalists that his agreement is “a very good deal for every part of the UK – particularly for Northern Ireland.”

“We should get on and get it done,” said the prime minister.

Mr Johnson says the passing of the treaty will allow the UK to start building a new partnership with the EU.

“I don’t think delay is to the advantage to the UK or the whole of Europe.”


Johnson promises ‘highest standards’ in bid for Labour votes

Boris Johnson insists the UK will “maintain the highest possible standards in social protections and the environment” – a key demand that the prime minister wants to use to persuade Labour to vote for his deal, Mehreen Khan writes.


Johnson ‘very confident’ MPs will back deal

Boris Johnson held a short press conference, citing an impending summit dinner for the fact he would only take a few questions, writes the FT’s political editor George Parker.

“Now is the moment for our parliament to come together and get this done,” he said.

Mr Johnson was asked by the FT if the EU27 leaders had echoed Jean-Claude Juncker in saying there would be no extension of the Brexit process after October 31.

The PM refused to answer the question: there is nothing in the summit communique to suggest a British request for a Brexit delay would not be granted by the EU27.
They want to avoid being blamed for the economic and political fallout.

The PM also claimed that the final agreement was “a very good deal” for Northern Ireland. Not a view shared by the DUP.

Nigel Dodds, the deputy leader of the DUP, has said the UK prime minister was “too eager by far to get a deal at any cost.”

Speaking in parliament, he said: “The Benn Act has forced Boris Johnson into somewhat desperation measures in order to avoid trying to get an extension.

“If he’d held his nerve – held out – he would have got better concessions which kept the integrity, both economic and constitutional, of the UK.”


A round up of today’s major events

• The UK and EU have agreed a Brexit deal, after signing up to a new customs border inside the UK between Northern Ireland and mainland Britain.
• Boris Johnson now faces an uphill struggle to pass the deal through the House of Commons. Northern Ireland’s DUP have indicated they will vote against it, striking a key blow against the government’s chances.
• Investors are positioning for volatility in the currency markets as they gauge the probability of the new deal passing parliament.

We are going to close the blog for this evening, but do keep an eye on FT.com for further updates. We will also have live coverage and analysis of the parliamentary vote on Saturday.

See you soon.