UPDATE 1-No-trade deal Brexit? JPMorgan says about one third chance

LONDON, Sept 3- JPMorgan said there was about a one third chance of a no-trade deal Brexit at the year end but that brinkmanship between Britain and the European Union over coming months would make it appear a much greater risk. Britain left the EU on Jan. 31 but talks have so far made little headway on agreeing a new trade deal with the bloc by the time a status-quo…

LONDON, Sept 3 (Reuters) – JPMorgan said there was about a

one third chance of a no-trade deal Brexit at the year end but

that brinkmanship between Britain and the European Union over

coming months would make it appear a much greater risk.

Britain left the EU on Jan. 31 but talks have so far madelittle headway on agreeing a new trade deal with the bloc by thetime a status-quo transition arrangement ends in December.

“The chance of no-deal is about a third, but withbrinkmanship part of the process it may appear higher than thatbefore agreement is reached,” JPMorgan analyst Malcolm Barr saidin a research note to clients.

EU chief Brexit negotiator Michel Barnier said on Wednesdaythat Britain must engage now with EU demands on guarantees offair competition, fisheries and solving disputes in order toseal a deal on new trade ties by a “strict deadline” ofend-October.

Barnier said London has so far not shown enough flexibilityand creativity on these. But he believed a deal on a newrelationship to replace decades of close-knit cooperation afterBrexit from 2021 was still possible, if difficult.

Britain and the EU are due to hold talks in London on Sept.7-11.

“It would be a surprise to us if enough progress were madeto bring agreeing a Treaty by end October into view,” JPMorgan’sBarr said.

“The absence of that progress will generate pressure forinterventions from UK and EU leaders; however, at this stage, wesee little that suggests any major softening in the EU’sposition or unity around it,” he said.(Reporting by Guy Faulconbridge; editing by Kate Holton)