DUP rejects Johnson Brexit deal ahead of EU summit
Pound slumps as Unionists scupper hopes of agreement
Updated : 09:58
UK Prime Minister Boris Johnson's attempt to secure a Brexit deal at a European Union summit was dashed at the last minute on Thursday when the Democratic Unionist Party said it would not support his proposals.
The pound immediately slumped on the news, falling 0.41% against the euro to 1.1542 and 0.33% against the dollar to 1.279.
There had been high hopes overnight that the UK was close to getting an agreement that would be acceptable to Brussels, but the DUP threw a spanner in the works saying it had issues over customs and sales tax arrangements in the proposals.
The DUP, which has propped up the government with its 10 votes, also influences the thinking of hard-right pro-Brexit Conservative MPs who have indicated they would not back a deal the Northern Irish rejects.
“As things stand, we could not support what is being suggested on customs and consent issues and there is a lack of clarity on Value Added Tax,” the DUP said in a statement on Thursday.
“We will continue to work with the government to try and get a sensible deal that works for Northern Ireland and protects the economic and constitutional integrity of the United Kingdom.”
Johnson was on Thursday scheduled to travel to Brussels for a two-day European Council meeting and present his plan. If unable to get a deal by Saturday Johnson would be forced to seek an extension to the October 31 Brexit deadline.
The DUP said it did agree with plans to have a customs border between Northern Ireland and the rest of the UK, along with concerns over the application of EU VAT rates in the region.
It also wants the currently suspended Stormont Northern Irish Assembly to have a veto over the arrangements.
Spreadex market analyst Connor Campbell said the DUP move now meant either Johnson would have to compromise further, the EU accept the DUP’s demands, or the Unionists "back down".
He added that "progress is still possible. It just might need an extension to allow a deal to blossom".
"Firmly strapped onto the Brexit rollercoaster, the pound tumbled following the DUP’s comments...That fall keeps the gains from this week intact, but takes it from yesterday’s fresh five-month highs," he said.