U.K. Prime Minister Theresa May finally took decisive steps in the Brexit negotiations in the last week. Her party agreed on a negotiation strategy that amounted to a “soft exit” instead of the hard break with the European Union that the most visible supporters of the Brexit vote wanted. That caused a couple of negotiations from her team. But it also means the EU might not receive the tax dollars and exit payments it wants to extract from the U.K. The result might be no negotiated deal on an exit, May said.
The pound, which had erased its earlier gains against the dollar following Johnson’s resignation, fell further after May’s Brexit comments.
May and European Union leaders have been reluctant to address the possibility of the E.U. and the U.K. failing to reach an agreement on Britain’s departure from the E.U. Failure to reach a deal could imperil the E.U.’s budget, as well as the rights of citizens in the U.K. and E.U. to live and travel away from home.