Forex – Pound Drops Over 1% as No Deal Brexit Talk Intensifies – The pound fell over 1 percent against the dollar on Monday afternoon as Britain’s new prime minister Boris Johnson reiterated his commitment to take the UK out of the EU on the 31 October ‘deal or no deal’. 

The prime minister also said he was planning to strike a new divorce deal with the European Union. 

At 13:45 GMT, cable slumped 0.99 per cent to 1.2258, the pound’s lowest level against the greenback since March 2017 when Theresa May triggered Article 50, and immortalised the quote ‘no deal is better than a bad deal’. 

GBP/USD fell below 1.2300 earlier in the session following comments from Conservative ministers over the weekend that suggested the government believed that a no deal Brexit was now the most likely outcome. 

The pound was lower against all major currencies on Monday. 

Johnson said the deal reached between his predecessor Theresa May and the EU was ‘dead’, but that there was scope for a new deal, and one that did not include the backstop. 

“What we want to do is to make it absolutely clear that the backstop is no good, it’s dead, it’s got to go. The Withdrawal Agreement is dead, it’s got to go. But there is scope to do a new deal.” 

The PM headed north as part of his government’s £300m growth initiative for devolved nations.

According to ministers. with little over three months to go before the UK is scheduled to leave the bloc, government departments are now working toward a no deal outcome. 

Chancellor Sajid Javid said the Treasury was stepping up its preparations for a no-deal exit, while the Duchy of Lancaster Michael Gove wrote in the Sunday Times that the government was now “working on the assumption of a no deal Brexit”. 

Dominic Raab, who replaced Jeremy Hunt as Forein Secretary last week, called the EU ‘stubborn’ and suggested that the UK would only renegotiate if the EU agreed to drop the Irish backstop. 

During an interview in Scotland on Monday afternoon, the new PM rejected Gove’s claim that the government was working on the assumption of a no deal, instead claiming it was working toward getting a new deal with the EU,

The PM went on to repeat that the UK would exit the bloc on the Halloween deadline with or without a deal, and confirmed it was “responsible for any government to prepare for a no deal if we absolutely have to.”

The pound was also down over 1 percent against the euro, with EUR/GBP at 0.9081 at 13:45 GMT.


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