Pound sinks to six-week low against the US dollar as fears mount over collapse of post-Brexit trade talks
- The Pound has fallen against both the US dollar and euro amid trade deal fears
- Mounting concerns about collapse of talks after row over Withdrawal Agreement
- EU Council chief Charles Michel has warned the move by PM is ‘unacceptable’
The pound slid today amid mounting fears that Boris Johnson’s plans to tear up the Brexit divorce deal could torpedo trade talks.
Sterling slumped to its lowest level against the US dollar since July, hitting a value of just under 1.29.
It was also 1.7 per cent lower against the euro at 1.10 as markets took fright at claims that the government is ready to break international law.
Currency experts said the pound was also taking a hit amid concerns the worsening Brexit negotiations could see further action from the Bank of England.
Sterling slipped lower against both the US dollar (top chart) and euro (bottom) as fears mounted over the prospects for a trade deal
Boris Johnson (pictured at PMQs today) insisted he was doing his ‘duty’ today as he faced a Tory mutiny for threatening to renege on the Brexit divorce deal
The PM insisted he was doing his ‘duty’ today as he faced a Tory mutiny for threatening to renege on the Brexit divorce deal.
Legislation published this afternoon would unilaterally decide details that Brussels insists must be settled by a joint committee, including customs arrangements between mainland Britain and Northern Ireland.
Northern Ireland Secretary Brandon Lewis sparked outrage yesterday by bluntly admitting that the measures will breach international law.
European commission president Ursula von der Leyen has warned that the move will undermine ‘prosperous future relations’.
But Mr Johnson told the Commons: ‘My job is to uphold the integrity of the UK but also to protect the Northern Irish peace process and the Good Friday Agreement,’ the PM said.
‘To do that we need a legal safety net to protect our country against extreme or irrational interpretations of the protocol, which could lead to a border down the Irish Sea in a way that I believe – and I think members around the House believe – would be prejudicial to the interests of the Good Friday Agreement and prejudicial to the interests of peace in our country.
‘That has to be our priority.’
The UK’s former ambassador to the US has waded into the row by suggesting that the dramatic step is a Trump-style bid to get a better deal in post-Brexit trade negotiations, which are at a critical stage.
Michel Barnier arrived in London this morning as the EU and UK conduct a make or break round of negotiations on the future trade relationship
European council president Charles Michel insisted breaking international law was ‘not acceptable’
Lord Darroch said he suspected Mr Johnson was trying to ‘create chaos’ so he could extract better terms, and there was an ‘aspect of the way Donald Trump would have done it’.
Fawad Razaqzada, a market analyst at ThinkMarkets, said: “Investors bet the renewed Brexit uncertainty calls for more monetary action from the Bank of England.
“The uncertainty surrounding the UK-EU trade situation has raised the prospects of the UK ending the transition period without a deal in place.
“With time running out fast, some investors are becoming increasingly pessimistic that an agreement will be reached in time.”
Connor Campbell, at Spreadex, said the pound’s losses this week had wiped out “all of the spirited growth it managed over a Brexit-ignorant August”.
But UK blue chip shares were enjoying a boost from the weaker pound, with the FTSE 100 Index up 1 per cent, ahead 56.7 points at 5,987.
Many firms in the top tier of stocks benefit from a falling pound as they make the bulk of their revenues overseas.