1. ITV Report

Brexit transition period must end by 31 December 2020, says EU chief negotiator Michel Barnier

Michel Barnier said the UK must continue to follow EU rules during the transition. Credit: AP

Britain's transition period out of the EU must end by 2021, said the EU's chief Brexit negotiator has said.

Michel Barnier said the "logical end" of British transition period must be 31 December 2020.

Given that Theresa May plans to trigger Brexit in March 2019, it means the UK would have less than two years to prepare for a full exit and complete a future trade deal with the bloc.

Mr Barnier also said that a Brexit treaty must be finalised by October 2018.

He stressed that the UK would be expected to continue abiding by EU rules throughout the transition period - including allowing the free movement of people within the bloc.

"This cannot be an a la carte transition period, the EU regulatory framework and all EU policies would still apply," he said.

In a tough speech, Mr Barnier said the transition must be for a "short and specific" period.

Mr Barnier hinted that Spain would hold a veto on transitional arrangements for Gibraltar. Credit: PA

He warned "we will not be moving backwards" on points laid out in the EU's guidelines for moving forward after leaders agreed sufficient progress had been made on initial issues.

It comes after Brexit Minister David Davis tried to argue that the Phase One deal between the UK and EU was not legally binding.

Mr Barnier also appeared to indicate that Spain would have a veto on any transitional arrangements covering Gibraltar, saying decisions on the issue would be "made for the 27, unanimously, by consensus".

Mrs May responded to that point at PMQs today, saying: "We are not going to exclude Gibraltar from our negotiations from either the implementation period or the future agreement."

Mrs May this week insisted that the UK could have a 'bespoke' deal. Credit: AP

Mr Barnier has delivered a series of slapdowns to British politicians in recent days, saying there is "no way" that the EU will allow them to build their own trade deal or will give the City of London a special status.

The Prime Minister on Monday insisted that the UK can still have a "bespoke" trade deal.

Meanwhile, the International Monetary Fund today downgraded its forecast for UK growth from 1.7% to 1.6% on the back of Brexit. It said its "gloomy" predictions had been proved right.