Brexit update: EU and UK agree on deal

Any agreement still has to be ratified in the UK parliament

The European Union and UK reached a historic Brexit deal, paving the way for Britain’s departure from the European Union after three years of negotiations. The pound rallied and UK stocks turned higher.

The pound surged more than 1 per cent on the news.

Sterling climbed to a five-month high as European Commission President Jean-Claude Juncker said the two sides had reached a fair and balanced agreement.

Any agreement still has to be ratified in the UK parliament, where British Prime Minister Boris Johnson lacks a majority. Northern Ireland’s Democratic Unionist Party, which had earlier refused to back a deal, is yet to comment. Its support will be crucial if Johnson is to get a deal through Westminster.

EU chief Brexit negotiator Michel Barnier informed the bloc’s 27 remaining governments on Wednesday that the legal text of a deal was almost completed, but not fully finalised, according to the EU official who was briefing journalists.

Barnier also told the 27 governments that the issue of “consent” — how Northern Irish politicians would operate any veto over the new customs system — had been resolved in the negotiating room.

The UK government’s representatives had signed up to the consent plan, Barnier said, according to the official. That suggests Johnson’s team had agreed to the contentious veto proposal, even if the DUP still had reservations.