The City AM has reported that the UK has said it will walk away from post-Brexit trade talks if Brussels does not drop its demand to align with EU state aid rules.
UK Brexit negotiator Lord David Frost has told his counterpart Michel Barnier that the UK is not willing to compromise on this point as the potential of a no-deal exit draws closer, The City AM said.
Brussels is demanding that the UK adopts EU rules that prevent the government from subsidising domestic companies at the detriment of Europe’s private sector.
Brussels is also demanding that the UK aligns its regulations on other things like labour and environmental standards in what would be known as a “level playing field” for businesses on both sides of the channel.
In return the EU would continue to trade with the UK on a no tariff basis.
GBP is pressured on negative Brexit headlines and could find itself unwinding some of the recent gains of late as the end of the month profit-taking ensures.