Moody's: Significant possibility of further deadlocks before a final Brexit agreement is reached

"The agreement in principle on the terms of the UK's withdrawal from the European Union is positive to the extent further delays would have reduced the time available to avert a "no-deal" scenario on 29 March 2019," Moody's Investors Service wrote in a report on Friday.

Key quotes

The forthcoming trade talks will likely be difficult and there is a significant possibility of further deadlocks before a final agreement is reached.

The risk of further deadlocks in talks is substantial and the uncertainty concerning the terms of UK's future long-term relationship with the EU will prevail beyond a transition deal until a conclusive final agreement is reached. 

If there is no deal, Moody's would likely see disruptions to trade and a further fall in sterling, which would severely affect sectors that are heavily dependent on imports and goods flows from and with the EU, including food retailers and ports, highly regulated by current EU frameworks, in particular the UK airport and aviation sector.