Sterling hits buffers as Boris warns Britain is prepared to walk away from trade deal with the EU
The value of the pound fell as Boris Johnson reignited concerns that Britain could leave the EU without a trade deal.
Laying out his post-Brexit vision, the Prime Minister said the UK would be pushing for a Canada-style free-trade deal, under which tariffs would be abolished and Britain would be largely free to set its own standards.
Earlier in the day the EU’s chief negotiator Michel Barnier was adamant that the UK would have to adhere to its rules to achieve the ‘level playing field’ required for an ‘ambitious’ trade deal.
Boris Johnson said the UK would be pushing for a Canada-style free-trade deal, under which tariffs would be abolished and Britain would be largely free to set its own standards
But Johnson said this was out of the question and warned that the UK was prepared to leave without a trade deal by the end of the 11-month transition period.
After previously describing the odds of a No Deal Brexit as a ‘million-to-one against’, the admission unnerved financial markets.
At one stage, sterling was down 1.3 per cent against the euro at €1.1743.
And it fell as much as 1.7 per cent against the dollar to as low as $1.2991.
The concern is that swingeing tariffs will be imposed on goods traded with the EU if the UK leaves the bloc with No Deal as World Trade Organisation rules kick in.
Neil Wilson, chief markets analyst at Markets, said: ‘The way the two sides have come out, traders are starting to consider No Deal risks again.
‘No Deal is not the base case by any means, but the EU and UK look in very different places right now at the start of talks. It’s going to be a very long and rocky road to get there and the shape of the deal will hinge on some important concessions on both sides.
‘The Government has come out swinging over the weekend with plenty of fighting talk, but they’re up against a tough opponent.’