Brexit negotiations won't move on to trade until the UK offers more money, but trade talks will start by the end of the year regardless, according to a leading journalist.
A study by the Resolution Foundation and the University of Sussex has found that a no-deal Brexit will leave families £500 a year worse off, hitting the poorest people in society the hardest.
John Peet, the political editor of The Economist, told Sam Delaney: "I think there needs to be more money on the table from the UK before the others are willing to talk about a trade deal."
But, he added, "if the UK starts having to say we’ll pay more towards the European Union that does seem to contradict one of the promises of the Brexit campaign."
He believes the EU thinks "the British government will blink because they’ll say 'we don't want to walk away with this, with no deal' so they feel the bargaining power is on their side. I just hope that the two together don’t behave irrationally which would lead an outcome that’s bad."
Despite this he still thinks "by the end of the year [the EU and the UK] will get on to saying, 'we do need to talk about a sensible trade relationship and probably some kind of transition.'"
Peet also said that rather than a second referendum as some are suggesting, "a better approach would be to say 'look we have to stick to our guns negotiations are tough but a deal is in the interests of both sides.'"
Listen to the full interview above