Brexit: A divorce deal with Britain 'very close', say EU negotiators

The European Union's Brexit negotiators told national diplomats in Brussels late on Thursday that a divorce deal with Britain was "very close", according to two sources present at the meeting.

The EU signalled on Thursday that it was engaging with new proposals emerging in Britain on how to avoid extensive checks on the Irish border after Brexit, a key potential deal-breaker in the unprecedented talks.

Following Friday's news, sterling rose to a 10-week high of 88.19 pence against the euro. The British currency also hit a five-day high versus the dollar of $1.3053.

The two sides are trying to push the divorce deal as well as an agreement on post-Brexit relations above the line in time for two summits of the bloc's leaders scheduled for Oct. 17-18 and Nov. 17-18.

A member of EU Brexit negotiator Michel Barnier's team briefed diplomats of the 27 states remaining in the bloc on latest developments on Thursday afternoon.

That person said progress was also being made on other outstanding issues, including the policing of any agreement and protecting goods from special origins, according to the sources.

The member of Barnier's team said he was open in principle to a planned British proposal on the emergency Irish border fix but that it has not yet arrived in writing from London and would need to be carefully analysed once it did.

Spain, sitting just north of Gibraltar - which will leave the EU along with Britain - and Cyprus briefed on talks with London over two separate protocols that will be added to any withdrawal deal, the sources said.