UK, EU plan special summit to sign Brexit deal

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Former British Foreign Secretary Boris Johnson has compared May's plan to putting the country's constitution in a "suicide vest" and handing the detonator to the EU.

Hopes are fading that Britain and the EU can strike a deal at an EU summit in October as originally planned, but there are growing expectations that the EU is planning another meeting for November.

"Westminster is going to be a cloud over sterling before the Tory conference", ING's Patel said, referring to May's party gathering starting on Sept 30.

May's spokesman said the prime minister would fight any attempt to oust her, adding that the government was focused on taking forward her so-called Chequers proposals which he described as the only credible plan for Brexit.

Headlines on the progress of Brexit negotiations have forced traders to switch positions rapidly in a currency market that is holding about US$ 5.5 billion in short positions on the pound, based on weekly futures positioning data.

EU leaders have issued instructions to their negotiator three times since the 2016 Brexit referendum, framing the union's collective response to divorce issues, the transition, and the terms of a non-binding "political declaration" on future relations.

May will present her case to her European Union counterparts at an informal meeting in Salzburg next Wednesday, before the other 27 leaders discuss how to respond among themselves.

"The treaty is clear, we have two years to reach an agreement before they leave... in March 2019".

With just 200 days to go to the scheduled date of Brexit, Mr Baker said that the PM would lack credibility with Brussels negotiators if she tried to press ahead with her departure plan at the party conference without the backing of her party.

Barnier refused to comment on the divisions in the governing British Conservative Party over Brexit. It is far from certain that this will be the case since the Eurosceptic ERG faction of the Tory party is implacably opposed to the "Chequers agreement".

Without a deal, the United Kingdom would move from seamless trade with the rest of the European Union to customs arrangements set by the World Trade Organization for external states with no preferential deals.

Lawmakers from the European Research Group (ERG), a grouping in May's Conservative Party which wants a sharper break with the EU, met on Tuesday night and openly discussed May's future.

The group argued that reverting to World Trade Organization rules, which can lead to the imposition of tariffs on certain goods, "would boost the U.K.'s trade with the rest of the world including Europe, lower domestic prices and boost inward investment".

May's government says its critics have failed to present a viable alternative to her Chequers proposal.

"I have long said, and repeated again and again, that the policy needs to be changed but I am supporting the person", he said.

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