Commenting on it being only one year until the UK leaves the EU, Danske Bank Chief Economist Conor Lambe said:
“It is now just one year until the United Kingdom leaves the European Union and, despite the progress that has been made to date, there is a significant amount of work still to do before Britain is Brexit-ready.
“There is still no agreed solution on how a hard border will be avoided between Northern Ireland and the Republic of Ireland. With maintaining membership of the EU customs union – which would have gone part of the way to solving the problem – ruled out by the UK Government, other solutions will need to be identified. Most of the focus of the discussions related to Northern Ireland that will take place over the coming weeks is likely to be placed on the ‘backstop’ option. This could see Northern Ireland maintain very close links to the EU in the absence of an alternative way to avoid a hard border. But the UK Government is hopeful that it will find a solution to the border challenge during the detailed trade talks and that the ‘backstop’ won’t be needed.
“The future trade deal is arguably the most important aspect of this negotiation. But there will not be enough time between now and the autumn, when the withdrawal treaty needs to be agreed, to finalise a full and comprehensive free trade agreement. Therefore, the discussions will have to continue during the transition period. Based on the time taken to conclude past trade deals, even with the additional 21 months that the transition period provides, the timeline is still very tight. And that’s not including the time that may be needed for the Government and businesses to have the processes in place to ensure they are ready for the agreement coming into force.
“With a year left to run until Brexit day, the chances of a no deal scenario coming to fruition in 12 months are now less than they were just a few months ago. But unfortunately, they are not yet zero.
“Businesses are still facing a cloud of uncertainty when it comes to their future long-term access to EU markets. While the progress made recently is welcome, the UK Government must keep up the pace in the negotiations. There is no time to lose.”