Leaders cautious about chances of an agreement as summit deadline looms

Negotiators from both the United Kingdom and the European Union continued to seek a Brexit divorce deal on Wednesday as the clock ticked down to an EU summit on Thursday and Friday where such an agreement might be ratified.

The BBC reported that rumors abounded on Tuesday that a deal was within reach but, by Wednesday, the mood was more somber, with government sources saying the chances of a breakthrough were "shrinking".

When Michel Barnier, the EU's chief negotiator, told reporters in Luxembourg on Tuesday morning that a deal "is still possible this week", the pound rose sharply against the dollar and by mid-afternoon, when reports surfaced that a draft deal was in the works, it rose further, hitting $1.275.

UK Prime Minister Boris Johnson was set to update his Cabinet on Wednesday afternoon about the state of play. Barnier was also due to make a statement.

Reuters reported that talks between the officials resumed on Wednesday morning, mere hours after the previous day's 16-hour session ended at 1:30 am.

France's finance minister, Bruno Le Maire, was cautious about the chance of success, telling Europe 1 radio on Wednesday there was a "glimmer of hope" that a deal could be reached.

Johnson had said he wanted to thrash out an agreement that ensured that the nation left the bloc in an orderly manner on Oct 31 but that it retains a close trading relationship with the EU. He has also said he would "rather be dead in a ditch" than ask the EU for an extension.

But his hands appear to be tied because members of the British Parliament have passed a law, the Benn Act, which compels him to seek an extension if there is not a deal on the table by Oct 19.

The main barrier to any deal continues to be the situation on the island of Ireland, where Northern Ireland is set to leave the EU along with the rest of the UK, and the Republic of Ireland will remain an EU member. All sides want to avoid the re-establishment of a hard border because it was a flashpoint in the past for sectarian violence.

As Johnson sought his elusive last-minute deal, Arlene Foster, the leader of Northern Ireland's Democratic Unionist Party, or DUP, met him on Tuesday evening to talk about the situation. The DUP is a minor party in the British Parliament but props up the ruling Conservative Party and its opinion on any new deal matters.

After the meeting, Foster said: "It would be fair to indicate that gaps remain and further work is required."

Former Brexit secretary David Davis said on Radio 4's Today program that the Conservative Party "euroskeptics" will be watching what the DUP says.

"Quite a lot of (Conservative Party) MPs will take their line from what the DUP say," he said. "If the DUP say this is intolerable, that will be quite important."

Owen Paterson, the former Northern Ireland secretary, told The Sun newspaper that a customs border down the Irish Sea would be "unacceptable" because it would effectively divide the UK.

If a last-minute deal is reached at the EU summit, British MPs will vote on it at an emergency sitting of Parliament on Saturday.