Sixty per cent chance of no Brexit trade deal, says UK minister

Liam Fox’s comments came in same week Bank of England governor warned of higher prices to come

British Secretary of State for International Trade Liam Fox. AP Photo

Britain is more likely than not to leave the European Union without a deal on trade, the UK’s international trade minister warned on Sunday.

Liam Fox told The Sunday Times newspaper that it was up to the EU whether an agreement is made, adding that the bloc's "intransigence" was "pushing us towards no deal".

Prime Minister Theresa May’s Conservative government has “made an offer to the EU which we believe is generous and some in the UK believe is over-generous”, said Mr Fox, putting the chances of the UK crashing out of the bloc without an agreement in March next year at 60:40.

Britain and the EU have both said they aim to agree a deal before October but negotiations have since stalled.

The EU has accused the UK of trying to cherry pick aspects of membership, including free trade access, without accepting its rules such as freedom of movement of EU citizens.

But Mr Fox, a staunch Leave campaigner in the 2016 referendum, said EU officials had a “theological obsession” with sticking to rules, which they prioritised over “the economic well-being of the people of Europe”.

Mrs May’s government remains deeply divided on how close economic ties with the trading bloc should be. Her finance minister Phillip Hammond, a Remain supporter in the 2016 referendum, supports close alignment but others such as Mr Fox want Britain to have a “hard Brexit” so it can try to make deals with other countries outside of the EU.

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The trade minister's comments came in the same week that Bank of England governor Mark Carney said the risk of Britain leaving with no deal was "uncomfortably high".

Such a prospect would be damaging to the economy, he warned, as no deal would mean “higher prices for a period of time” for the British people.

His comments were criticised by Brexiteers in Mrs May’s party, including Jacob Rees-Mogg, a vocal opponent of the EU.

Mr Rees-Mogg said: “Mark Carney has long been the high priest of Project Fear, whose reputation for inaccurate and politically motivated forecasting has damaged the reputation of the Bank of England.”

In a bid to agree a deal, Mrs May cut her holiday short on Friday to meet France’s Emmanuel Macron to seek support for her Brexit plans.