Brexit 2020: The Status Now

August 06, 2020 11:06

The United Kingdom (UK) left the European Union (EU) on 31 January 2020. It is now in a transition period until 31 December 2020. During this period the UK still remains in the EU's customs union and single market and must comply with all EU rules.

What is the transition period?

During the transition period which ends on 31 December 2020, the UK remains in the EU customs union and single market which means most things will stay the same, such as:

  • Freedom of movement
  • Travelling to and from the EU
  • UK-EU trade to continue without any border checks
  • EU passporting rights, to offer all services in this area

However, the UK has already left EU institutions and there are currently no British MEP's in the European Parliament. The transition period is necessary to allow EU and UK negotiators time to agree on what the future relationship will look like.

What progress has been made so far?

While negotiations on a future trade deal have been going on for several months there is still significant disagreement.

The UK wants as much access to goods and services to the EU without being in the customs union and single market, as well as freedom from the European Court of Justice. They have proposed a free trade deal with separate agreements on other issues.

The EU wants to protect the integrity of its single market and have a so-called 'level playing field' which would see both countries maintain similar standards on issues like worker's rights and environmental protection. The EU wants to show life is better inside the 'bloc' and that countries cannot 'cherry-pick' certain benefits without the obligations.

Brexit after the transition period

As the deadline for extending the transition period has passed, the UK will either leave the EU without a trade deal in January 2021 or start its new redefined relationship if on the political side a solution can be found.

If a trade deal is reached it could either be the full comprehensive deal the EU wants - which is the least likely as trade deals usually take seven years to build, instead of just a few months - or the UK version of a free basic trade deal with separate agreements to be worked out later.

Most analysts believe high-level political involvement could see some sort of deal by year-end. UK Prime Minister Boris Johnson is due to get directly involved in trade talks this month with scheduled talks to the presidents of the European Commission and the European Council.

While Boris Johnson has agreed to a revised deal with the EU, a no-deal Brexit is possible if negotiators haven't come to an agreement by 1 January 2021. This would mean the UK would immediately leave the EU's single market and customs union and would be put on WTO (World Trade Organization) trading terms which will include checks and tariffs on the border and the end of free movement.

The Offer of Admiral Markets - One World - One Broker

It doesn't matter if you are a client under Admiral Markets UK Ltd or any other of our legal jurisdictions, all clients get the same trading conditions and spreads and our best service offer.

If you would like to stay under Admiral Markets UK Ltd, you will be able to do so, even after a hard Brexit would come into effect.

If you would like to move/migrate, any client is able to do so, just by going online to your account management page in the Trader's Room. Admiral Markets is globally prepared to offer its clients the best service you expect, by having several licenses in the EU and also other regions of the world.

To the end of 2020, more clearness from the political side is to be expected. Until this time, we will inform all of our clients with any new major details.

Trade "The Brexit"

Traders are always looking for opportunities in hot markets. Deal or no-deal, the Brexit event is likely to cause significant volatility. Instruments that are likely to be most affected are GBP/USD, FTSE 100, DAX 30 and other European indices and prominent stocks.

Wherever the chips may fall - expectations are that there will be some large moves in both directions. With trading products such as CFDs (Contracts for Difference), traders can take both long and short positions to potentially benefit from either an upwards rally or big downturn.

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