Northern Ireland DUP lawmaker says: We're heading for no deal Brexit

BELFAST (Reuters) – A senior member of the Northern Irish party which props up Prime Minister Theresa May’s government said on Tuesday that it looked like the United Kingdom was heading towards leaving the European Union without a divorce deal.

With less than five months until Britain is due to exit the EU, May has yet to clinch a divorce deal, with negotiators stuck on how to keep open the border between British-ruled Northern Ireland and EU member state Ireland.

Sterling fell to a day’s low against the dollar of $1.3020 and British government bond futures rose to a session high on the news.

“Looks like we’re heading for no deal,” Jeffrey Donaldson, one of 10 Democratic Unionist Party lawmakers whose support May currently needs to get any deal passed in the British parliament, said on Twitter.

“Such an outcome will have serious consequences for economy of Irish Republic. In addition, UK won’t have to pay a penny more to EU, which means big increase for Dublin. Can’t understand why Irish Government seems so intent on this course.”

Many business chiefs and investors fear politics could scupper a deal, thrusting both the EU and the United Kingdom into a “no-deal” Brexit that they say would weaken the West, panic financial markets and block the arteries of trade.

Irish Foreign Minister Simon Coveney warned last month of “carnage” if Britain crashed out without a deal, though he said that would mostly be felt by Britain, with Ireland likely to benefit from “huge solidarity” from fellow EU member states.

Ireland’s Central Bank has forecast that If Brexit leaves World Trade Organisation rules governing trade between Britain and Ireland – a so-called ‘Hard Brexit’ – Ireland’s GDP will be 2.9 percent lower in the long run.

Ireland’s economy has grown faster that any other in the European Union for the past four years and the central bank expects it to expand by 6.7 percent this year.

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