Top EU lawmaker says UK's aims a mystery

German minister sees hope of 'soft' Brexit, with conditions

That may change as negotiations begin, according to Bloomberg's Anooja Debnath.

Britain could lose its budget rebate and opt-outs if it changes its mind about Brexit and decides to remain a member of the European Union, an influential MEP has suggested.

An agreement between the Tories and DUP is thought to be close, with Mrs May saying the talks had been "productive" and emphasising the need for "stability" in government.

The EU side has said that this will only happen when "sufficient progress" has been made on phase one and that they will determine the level of progress.

An initial round of talks between May and DUP leader Arlene Foster ended with no agreement on Tuesday, although both sides said they were hopeful, with talks to resume Wednesday.

While the DUP are deeply eurosceptic, they have balked at some of the practical implications of a so-called hard Brexit - including a potential loss of an open border with the Republic of Ireland - and talks will touch on efforts to minimize the potential damage to Northern Ireland.

Britain begins historic talks on leaving the European Union on Monday while still mourning the victims of a devastating fire and reeling from an election that has badly weakened the government.

While British Prime Minister Theresa May insists she will follow the results of last year's Brexit referendum, her disastrous showing in elections last week has raised fresh questions about how-and if-Britain will leave the bloc.

"It's going to be hard".

The Chancellor Philip Hammond has said that leaving the European Union without any deal on trade would be "a very, very bad outcome" but maintained that there are other outcomes which could be worse.

There will have to be some soul searching within the Conservative Party as to why it lost its overall majority despite the fact that at the start of the campaign it was so far ahead of Labour. In a tweet yesterday afternoon, he said: "Back this weekend in my countryside, Savoie, to draw the strength and energy that the long hike requires".

While Britain's economy has shown unexpected resilience since the Brexit vote, there are signs of weakness.

Asked about Mr Verhofstadt's comments, European Commission spokesman Alexander Winterstein played down suggestions of a change in the UK's status, telling reporters: "The UK is a member of the European Union and will remain so until it leaves, so that is where we are".

The EU official added that all the possible options regarding UK-EU relations post-Brexit were on the table, including the one of "no deal".

"Until the negotiations come to an end, of course there is always the possibility to re-open the door", said the French President.

It highlights deep divisions between the United Kingdom and the EU's approach to talks, especially on the sequencing of the negotiations, with the United Kingdom wanting to sort out the financial settlement in parallel with an agreement on future relations.

Speaking to the BBC's Andrew Marr, the Chancellor said leaving the European Union also meant opting out of the bloc's trading arrangements.

It said Davis entered the talks "confident that he can get a positive outcome and secure a new deep and special partnership with the EU" as well as a "bold and ambitious deal". The party will also have to decide whether it wants to keep May at the helm of the party, although I'm not sure whether another leadership contest at this point in time is a good idea.

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