Britain, EU strike financial services deal — BREXIT

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The biggest obstacle to a Brexit deal has been Britain's wish to keep the border of its province of Northern Ireland with Ireland open - preserving frictionless trade and a 1998 peace deal that ended sectarian violence - while leaving the EU's single market and customs union to forge its own trade deals.

The British pound jumped as much as 0.5 percent against the dollar following the report.

It offered a glimmer of hope for anxious businesses, as it said policymakers saw greater clarity on Brexit emerging "in the relatively near term".

Many top bankers fear that Brexit will slowly undermine London's pre-eminent position as the world's biggest worldwide financial centre and a Reuters survey found that, so far, just over 600 are moving away.

According to the report, the deal was expected to be completed within three weeks.

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Bank of England Governor Mark Carney said a disruptive no-deal Brexit was not the central bank's main assumption but if there was a shock to the economy, it was not possible to say if rates would need to rise or fall in response.

Britain is now home to the world's largest number of banks and hosts the largest commercial insurance market.

In addition, London dominates Europe's 5.2 trillion euro investment banking industry.

The U.K. predictions, including the outlook for faster inflation, are based on market measures indicating that the BOE will deliver about three more quarter-point rate hikes by late 2021, more than were foreseen a few months ago.

The technocratic argument is similar to one the Governor, Mark Carney, used before the referendum when he warned that there were circumstances in which the United Kingdom may need higher rates even after it voted Leave. The EU has no such regime for major activities including commercial bank lending and parts of the insurance sector.

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Yes. Government ministers have said that the current equivalence system is opaque and unreliable because all decisions are made unilaterally by Brussels, and can be scrapped at 30 days' notice.

Currently, the European Union would be able to withdraw market access with a month's notice if it decides that a partner country no longer has equivalent financial services regulations.

Brexit Secretary Dominic Raab has been accused of a "messy U-turn" after he indicated he expected an European Union withdrawal deal finalised by November 21, only for his department to later insist there was no set date.

It followed speculation that a wider agreement over the terms of Brexit was in sight.

Faced with having to continue relying on a foreign financial centre from next March, the bloc - and France in particular - is keen to tighten conditions for granting equivalence in order to keep up the pressure on UK-based firms to shift operations to the European Union and help it build up its own capital market.

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The EU originally proposed keeping Northern Ireland alone under EU customs rules and other economic regulations in order to avoid disrupting the peace in the province by setting up barriers on the Irish border, the only EU-UK land frontier.