THE pound tumbled yesterday against the euro and dollar as fears of a no-deal Brexit mounted.
Sterling’s latest slide has been triggered by European Union leaders’ rejection of Prime Minister Theresa May’s Chequers free-trade plan, at their summit in Salzburg.
European Council President Donald Tusk, while noting leaders of EU countries saw “positive elements” in the Chequers proposal, declared “the suggested framework for economic cooperation will not work, not least because it risks undermining the single market”.
Mrs May has ruled out the UK remaining in the single market. And Michel Barnier, the EU’s chief negotiator on Brexit, has said the UK cannot have “single market a la carte”.
The key issue of how to deal with the border between Northern Ireland and the Republic of Ireland also remains unresolved.
The prime minister conceded yesterday there were “two big issues” on which the UK and EU remained a “long way apart”, claiming “no deal is better than a bad deal”. She asked for the EU to put counter-proposals.
In August, International Trade Secretary Liam Fox put the chances of a no-deal Brexit, where the UK leaves the EU without reaching agreement over its future relationship with the bloc on trade and other key issues, at 60-40.
Confederation of British Industry director-general Carolyn Fairbairn warned earlier this month, during a visit to Glasgow, that a no-deal outcome would be “catastrophic”.
Mrs May yesterday said the UK “must and will” continue preparing for no-deal. The pound was, at 5pm in London, trading around $1.3066, down by 1.7 cents on its Thursday close. The euro was, at 5pm, trading around 89.85p, up by 1.14p on its previous close.
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