The European Union has agreed to postpone the United Kingdom’s exit from the bloc for three months, paving the way for a departure on, or before, Jan. 31, 2020. The British pound was little changed, trading at 1.2830 versus the dollar.
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"The EU27 has agreed that it will accept the UK's request for a #Brexit flextension until 31 January 2020. The decision is expected to be formalised through a written procedure," Donald Tusk, president of the European Council, tweeted Monday.
The decision, which prevents the U.K. from crashing out of the E.U. without a deal, comes after the two sides reached a deal on Oct. 17 that would have allowed the U.K. to leave, but Prime Minister Boris Johnson was unable to get parliament's approval.
That deal called on Northern Ireland to remain part of the U.K.'s customs territory, which would make it an entry point into the E.U.'s single market. No customs checks would've be done at the border between Ireland and Northern Ireland. The rest of the deal was mostly the same as agreed to in the 2018 withdrawal agreement.
Brexit was originally supposed to occur on March 29, 2019, but was delayed after then Prime Minister Thresea May was unable to get the deal through Parliament.
Once Brexit is agreed upon, the two sides will have a transition period of up to 21 months, which would allow for the negotiation of trade deals and theoretically make the transition easier.