Brexit Bulletin: Race to Finish

(Bloomberg) -- Today in Brexit: A Cabinet meeting this week could become a turning point.

The U.K. government has, officially, been quiet about Brexit for two weeks. That eerie silence could be about to end.

Conservative Party members speculated over the weekend that Prime Minister Theresa May will give ministers an ultimatum to back a draft Brexit deal, and a Cabinet meeting is scheduled for Tuesday.

But does she have something concrete to talk about? There was plenty of pushback against a Sunday Times report that a deal has been done. Cabinet minister James Brokenshire said on Sunday that negotiations “are still very firmly continuing,” and May's spokesman also pushed back against the idea that the agreement was in the bag. The Telegraph reported that Brexit Secretary Dominic Raab was making demands about the Irish border that were overruled by May's deputy as recently as this week.

Still, there are increasing signs that we're getting near. May's de facto deputy, David Lidington, said on Friday that the U.K. and the European Union are “certainly very close to resolving” the border issue.

In private, officials on both sides say the next time major Brexit news breaks is likely to be when they have agreed to the terms of the divorce.

Getting a deal in Brussels is the easy bit, compared with getting it past her Cabinet and Parliament. The crucial test will be if May can persuade Attorney General Geoffrey Cox to back her plan. If he does, other senior ministers will also get behind the deal, a person familiar with the matter said.

By Friday, May wants to get to a place where the EU can call a summit in November to get the deal signed off, the Sunday Times reported. That would allow May to rush the deal through Parliament in December — something the government has long indicated it wants to do. They're in a rush because legislation needs to go through Parliament in time for Brexit day in March. (And if investors come back from Christmas without clarity, markets won't take it very well.)

It's not just the U.K. side that's gone quiet. The European side has too. But chief EU negotiator Michel Barnier is giving a speech today at 8:30 p.m. Brussels time.

Today's Must-Reads

• The section of the Brexit deal on how the City will access EU markets after Brexit is all but settled, the Financial Times reports. It's been easy because the U.K. isn't asking for much and because the political declaration on the future relationship isn't binding.
• Forgotten why the Irish border is such a big deal? Dara Doyle explains.

Brexit in Brief

Second Referendum | The campaign for a re-run of the 2016 vote is stepping up. More than 1,500 lawyers are urging May to allow another plebiscite, arguing that people should know what they are voting for. Former Prime Minister Tony Blair urged Parliament to vote down May's Brexit deal and engineer a so-called People's Vote, and more than 70 business leaders signed a letter calling for a re-run. Polls show there's been a shift toward Remain, but then again polls also showed Remain mostly in the lead in 2016.

Get to Work | Denmark is urging Brussels to work much faster to avoid the dysfunction that would ensue in the event of no deal. A key concern is that the EU still doesn't have a tenable plan to ensure banks maintain access to vital financial infrastructure in the form of London-based clearing services, according to Prime Minister Lars Lokke Rasmussen.

“No Russian Money” | Arron Banks, the businessman whose donations to the Brexit campaign are being investigated by police, denied on the BBC that the money came from Russia, saying it came from his own companies. Banks also denied reports in the Observer and Open Democracy that he may have misled members of Parliament about the staff at his companies working on the campaign.

One Vote Flipped | Banks also said that with hindsight, he'd probably vote Remain. “The corruption I've seen in British politics, the sewer that exists, and the disgraceful behavior of the government over what they're doing with Brexit and how they're selling out, means that if I had my time again I think we would have been better to probably remain and not unleash these demons.”

Secrets and Drugs | Drug companies advising the U.K. on how to maintain medicine supplies after a no-deal Brexit have signed non-disclosure agreements banning them from revealing information on planned border arrangements and supply routes, Politico reported.

Big Short | Steve Eisman, the Neuberger Berman Group money manager who famously predicted the collapse of subprime mortgages before the 2008 financial crisis, is shorting two U.K. banks over expectations of a no-deal Brexit. He might make even more bets. “I'm shorting two stocks in the U.K., but I've got a screen of about 50, and I might short all 50 if I think Jeremy Corbyn is going to be prime minister,” Eisman said.

Stress Test | Barclays Plc was the worst performer among 48 banks in Europe's toughest stress test yet, underscoring the vulnerability of U.K. lenders to weak growth, credit losses and Brexit.

On the Markets | Sterling could “blast through” $1.3500 within two days if a divorce deal is agreed on, according to Mizuho Bank. The currency rallied nearly 2 percent Thursday to above $1.3000 after a Times report of an agreement for U.K. bank access, even as officials denied it. It rose again after the Sunday Times report, trading at $1.3010 early this morning. 

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To contact the editor responsible for this story: Lisa Fleisher at lfleisher2@bloomberg.net, Jones Hayden

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