Brexit talks: EU says a breakthrough could be months away

British hospitality industry in limbo as Brexit looms
British hospitality industry in limbo as Brexit looms

Brexit talks are moving along -- but not quickly enough.

Britain and the European Union concluded a fourth round of divorce negotiations on Thursday without achieving a breakthrough that would move talks onto their next phase.

Chief EU negotiator Michel Barnier and David Davis, his British counterpart, said that their discussions had been constructive.

But Barnier said that "sufficient progress" had not been made on key issues that must be settled before the focus of talks shift to Britain's future trading relationship with the EU. He said it could take weeks or months for the first set of issues to be addressed.

"It's true there are differences of opinion," Davis acknowledged, while also insisting that "we're making decisive steps forward."

British Prime Minister Theresa May sought to reboot negotiations in a major speech delivered last week in Florence, Italy. Barnier has described the speech as a step forward, but warned that it must be translated into a precise negotiating position.

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The EU says consensus must first be reached on the rights of millions of citizens who have crossed borders and settled in Britain and Europe, and on managing the land border between Ireland (in the EU) and Northern Ireland (part of the U.K.). The question of how much the U.K. should pay to leave the EU must also be resolved.

The clock is ticking: 15 months have passed since the U.K. voted to leave the EU, and six months since it gave the bloc formal notice, starting the countdown to departure in March 2019.

Companies are becoming increasingly anxious about the lack of clarity.

Many banks and financial services firms based in Britain are planning to shift thousands of jobs and operations to the EU to ensure they can continue to do business across the bloc's 27 remaining members.

More than 100 companies including Ford (F), GE (GE) and IBM (IBM, Tech30) wrote to the top negotiators earlier this month urging the two sides to agree a transitional period of up to three years to give them more time to adapt.

"Our businesses need to make decisions now about investment and employment that will affect economic growth and jobs in the future," they wrote.

May said last week that she would seek a two-year transition period.

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It's not just businesses that are worried.

Bank of England Governor Mark Carney warned earlier this month that Brexit represents a real shock to the economy.

"Monetary policy cannot prevent the weaker real incomes likely to accompany the move to new trading arrangements with the EU," he said.

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