This week will be a critical moment for Britain and the European Union (EU) as they seek to find a solution to the problem of the Northern Ireland protocol governing the flow of trade between the UK and Ireland after Brexit.
According to a statement reported over the weekend, the UK will tell the EU again this week that significant changes in trade agreements are crucial to restoring relations between the two sides.
The protocol is part of a Brexit deal negotiated by Prime Minister Boris Johnson with the EU.
However, less than a year later, the UK has asked for a reshuffle due to obstacles faced by businesses when importing goods from Britain into the region.
Meanwhile, European Commission Vice President Maros Sefcovic said the EU would submit a new proposal this week to solve the problem.
Still, Sefcovic insisted that he would not renegotiate the protocol, and that the solution reached should be within the terms of an agreement designed to keep the border open between Northern Ireland and Ireland (EU).
During the European session, the pound traded steady around 1.3650 against the USD, supported by increased expectations of an interest rate hike by the Central Bank of England (BOE).
Still, investors need to be wary if PM Johnson decides to reject the EU proposal and continues to insist on renegotiating the protocol, which is sure to meet the bloc’s opposition.
