A Brexit deal can yet be achieved, even if it is not a particularly ambitious one

This is plainly not the negotiating position of either the UK or the EU, but there’s enough there to allow both sides to claim they have achieved some sort of a climbdown by the other.

The continued fly in the ointment is mistrust, and where there is mistrust, compromise is hard to agree. To the UK, Brussels seems intent only on keeping Britain in some way trapped within its own orbit; for the EU, there is the suspicion that the UK will not keep its word on level playing field pledges, a belief given some legitimacy, it has to be said, by the Internal Market Bill, which contradicts some of the previously agreed Withdrawal Agreement.

Logically, EU officials are right to be apprehensive; there is not a lot of point in leaving the EU unless it provides freedom to diverge and do things differently.

In attempting to sustain the bluff of his position, Prime Minister Boris Johnson insists that no-deal is a “good outcome” and that the UK could thrive without an FTA. Thrive is possibly not the right word, for so much depends on how structurally the UK economy adapts to such a change in circumstance. But what may well be true is that the difference, at least in terms of the economics, between no-deal and an FTA is not that great in the long run.

Virtually all mainstream economic modelling of the economic impact of leaving the EU assigns significant long term harm to a no-deal outcome compared to staying in the EU. Even the Government’s own assessment, published two years ago, found that GDP would be 7.6pc lower after ten years relative to staying in, all other things being equal.

But here’s the point. The same analysis found that the economic hit would be reduced by only 2.7 percentage points by a conventional FTA, or little more than 0.3pc per annum. The difference is not entirely to be sneezed at, but compared to the many other economic variables likely to assail the nation over the next ten years, it is basically neither here nor there, and possibly explains why the Prime Minister is seemingly so relaxed about the prospects of a no-deal outcome. The calculation would be that the freedom to diverge implicit in no-deal is worth a lot more to UK GDP than that 2.7pc.

Even so, it’s not going to be an easy ride. Significant short term challenges arise from failure to agree tariff and quota-free trade with the EU. Let’s skip the automotive sector for a change, whose complaint is in any case heard often enough, and focus instead on farming and financial services.

Minette Batters, president of the National Farmers Union, says no-deal would be the biggest shock to UK farming since repeal of the Corn Laws nearly two hundred years ago. Good, say some; by opening up the market to all comers, the effect will be to reduce food prices and therefore make everyone better off. Well, possibly, but not necessarily. The benefit also needs to be weighed against the cost to farming livelihoods.

Start with what the UK Government response to a no-deal scenario might be in terms of tariffs, expected to be the subject of intense Cabinet discussion this week. The Department for International Trade has already published a schedule of tariffs it would expect to impose after leaving the EU single market, but these seem to be predicated on reaching a deal. Quite how this schedule would be applied in the event of no-deal has yet to be decided.

As things stand, roughly 30pc of food consumed in the UK comes from the EU. If the published tariffs were applied to these goods, it would in aggregate raise UK food and drink prices by between 2pc and 4pc from the beginning of next year, according to internal Government estimates. On the Richter scale of inflationary shocks, this is not huge, but at a time of impending mass unemployment, it is not something you would want to impose on the population.

The Government has said that whatever the EU decides to do, it won’t levy tariffs on these imports initially and hopes that in time a degree of import substitution from UK farmers, denied tariff free access to European markets, will naturally kick into effect to compensate for any loss of EU export markets.

Unfortunately, UK farming is not yet geared up for such a switch. As an industry, it remains disinclined to make the necessary investment until it knows what the long-term tariff structure might be. There is no guarantee the UK won’t agree tariff-free trade with the EU at some stage in the future, in which case any investment in import substitution would be for nothing.

Alternatively, the Government could go the unilateral free trade route, and be tariff-free to the world as a whole including the EU. That might deliver lower prices, but it would be curtains for large parts of the industry, unable as it would be to compete with cheap foreign imports. The transition to a more competitive farming industry would be a brutal one.

If we now look at the export side of the ledger, you have a similar sort of problem. Some 30pc of British lamb is exported, overwhelmingly to the EU. Subjected to the EU tariff of 46pc, UK producers would be priced out of European markets and forced instead to sell their lamb at home. Pretty soon there would be a glut of the stuff domestically, prices would plummet, and many lamb producers would become unviable. There’s another bailout the Government would be on the hook for.

The UK Government has struggled to make financial services, which are not normally covered by FTAs, a part of the negotiations with the EU, so it might be argued that no-deal makes no difference to their position. Attempts to include financial services by way of an annex to the main agreement have fallen by the wayside.

Most firms have as a consequence already taken evasive action with costly workaround arrangements. Even so, there is some hope that an FTA might provide the building block on which greater access to European markets could eventually be won. The acrimony of a no-deal outcome would likely put pay to such ambitions.

We’ve had more than four years to prepare for our now imminent rupture with the EU, but neither the Government nor the business community seem to have used them well. There is a deal to be done if Boris Johnson wants it. The calculation in markets is that he would be a fool not to. It’s hard to disagree.