EU's Tusk, Britain's May meeting for Brexit talks in London

Another, issued by Theresa May's team, put a tougher spin on events, insisting the prime minister had told Tusk "the United Kingdom would seek the best possible deal for Gibraltar" and "there would be no negotiation on the sovereignty of Gibraltar without the consent of its people".

"Both leaders agreed that the tone of discussions had been positive on both sides, and agreed that they would seek to remain in close touch as the negotiations progressed".

The two politicians smiled on the doorstep of May's 10 Downing St. office before a meeting in London that lasted two hours. "Agreed to stay in regular contact throughout process".

The European Parliament on Wednesday backed the bloc's chief negotiator in demanding that Britain pay as much as 60 billion euros ($64 billion) for outstanding commitments.

European Union chief negotiator Michel Barnier called parallel talks on Britain's exit from the European Union and a future trade relationship "a very risky approach" that he is bent on avoiding.

On Thursday Mrs May met Mr Tusk for the first time since triggering Article 50, as both sides sought clarity on the issue of Gibraltar. Britain wants the two strands to go hand-in-hand.

"The moment I'll turn my view around and turn materially long on sterling is when I know the European Union is willing to give Britain a good deal on services - financial services to be more specific", said Jordan Rochester, currency strategist with Nomura.

Mrs May has said that by Brexit Day in March 2019 she expects the shape of a new UK-EU trade relationship to be clear, but appeared to accept that the formal conclusion of any agreement will have to wait until after withdrawal.

Asked about this possibility, she told Sky News television: "Once we've got the deal, once we've agreed what the new relationship will be for the future, it will be necessary for there to be a period of time when businesses and governments are adjusting systems and so forth", she said.

The spokesman added that she had said "there would be no negotiation on the sovereignty of Gibraltar without the consent of its people".

Barry Hatton contributed reporting from Lisbon.



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