The Prime Minister is set to provide an update on the negotiations and potentially break the deadlock between the two parties ahead of talks resuming on Monday.
Anticipation of her speech has pushed the GBP/EUR exchange rate down -0.6 per cent to €1.130.
According to reports, Mrs May will call upon her fellow EU leaders to be more “imaginative and creative” when approaching the negotiations, which have stalled after three rounds.
The parties are currently unable to agree on the so-called “divorce bill” payable by the UK, with the government trying to press on with the issue of trade relationships and the EU refusing to begin discussing other areas of the separation until the upfront costs have been settled.
Mrs May is expected to say, if Brexit can progress “smoothly and sensibly”: “If we can do that, then when this chapter of our European history is written, it will be remembered not for the differences we faced, but for the vision we showed; not for the challenges we endured but for the creativity we used to overcome them; not for a relationship that ended but a new partnership that began.”
It is rumoured that the Prime Minister intends to offer the EU payments in exchange for a two-year transitional period, during which time the UK would have access to the single market but be free to forge its own trade deals with nations outside of the Union.
The payments to the EU budget would be to ensure that no other member nation has to step up its levels of contribution during the transition period to make up the shortfall and is expected to cost in the region of £17.5 billion (€20 billion).
While this could help kick start negotiations again, the sum is only a fifth of the commonly-touted €100 billion figure often suggested as the cost of the UK’s divorce from the EU.
EU Chief Negotiator Michel Barnier is expected to respond quickly to Theresa May’s speech with a statement of his own, so markets will soon learn whether her comments have gone down well or not with Brussels.
Delivered and upcoming speeches from Mario Draghi and Vitor Constancio – European Central Bank (ECB) President and Vice-President respectively – could create euro movement today if there are any hints given regarding the monetary policy outlook.
The ECB is expected to announce tapering to its quantitative easing programme after its policy meeting next month and may have been prompted to become more hawkish after the latest upbeat outlook from the US Federal…