Theresa May promised that the UK would continue paying into EU budgets and abiding by European court rulings

Theresa May conceded yesterday that she is prepared to pay up to £40 billion in return for a Brexit transition deal that means Britain will as good as remain in the European Union until 2021.

Matt Chorley on why the speech was significant

In a significant compromise with the EU, the prime minister said that the UK would “honour commitments” made during its membership of the bloc and that no European country would be left worse off by Brexit.

Hours after Mrs May set out her stall in a speech in Florence, Britain was downgraded by the credit rating agency Moody’s, which cited economic uncertainty caused by complex Brexit negotiations and the likelihood of weaker public finances. The new rating is AA2, a notch below the previous position.

The prime minister did not