Brexit prediction: Banking giant expects deal to be struck by early November

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The US investment bank insisted its “core view” remains that a “thin” trade agreement between the UK and the EU will be reached by early November, which would be in place by the end of the year when the transition period comes to a close. But Goldman Sachs warned the possibility of talks breaking down could not be ruled out.

It added the perceived probability of no deal is likely to continue beyond the EU summit on October 15.

The bank is advising clients to buy sterling.

Its analysts suggest going “long” on the pound against the euro, targeting a rise to 87p from the current 91p.

The prediction comes after Boris Johnson and Ursula von der Leyen held a conference call on Saturday following the final round of scheduled talks between Britain and Brussels last week.

The Prime Minister and the European Commission President ordered their chief negotiators to “work intensively” in a bid to finally reach a deal.

In a joint statement, the two leaders said: “The President of the European Commission, Ursula von der Leyen, and the UK Prime Minister, Boris Johnson, spoke today about the state of play in the negotiations on the future relationship between the UK and the EU.

“They agreed on the importance of finding an agreement, if at all possible, as a strong basis for a strategic EU-UK relationship in future.

“They endorsed the assessment of both chief negotiators that progress had been made in recent weeks but that significant gaps remained, notably but not only in the areas of fisheries, the level playing field, and governance.

“They instructed their chief negotiators to work intensively in order to try to bridge those gaps.

“They agreed to speak on a regular basis on this issue.”

Speaking on Sunday, Mr Johnson insisted a deal is “there to be done” but warned of major stumbling blocks.

He told the BBC’s Andrew Marr Show: “I think it’s there to be done. Alas, there are some difficult issues that need to be fixed.

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“There is no question that the EU needs to understand that we’re utterly serious about needing to control our own laws and our own regulations.

“And similarly they need to understand that the repatriation of the UK’s fisheries which were lost in 1973 is very important.”

The Prime Minister added that the UK simply wants the same deal the EU has already given Canada.

Responding to a comment made by Dutch Prime Minister Mark Rutte that an agreement between the two sides is a “geopolitical necessity,” Mr Johnson said: “Good for Mark, in which case I hope that they’ll agree to the deal that we’ve set out.

“I hope that they’ll agree to the deal that we’ve set out because it’s a very good deal for the EU.

“All we’re asking our friends and partners to offer is terms that they’ve already offered to Canada which is you know a long way away from here.

“We’re very close to our European friends and partners, we’ve been members of the EU for 45 years, I see no reason why we shouldn’t get those sorts of terms.”

He added: “I don’t want the Australian-WTO type outcome, particularly, but we can more than live with it.”

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