Sterling suffered its worst day in seven weeks after Boris Johnson said that he would swap tariffs for sovereignty if Brussels insisted that Britain followed European Union rules, renewing fears of a hard Brexit.
After the prime minister’s speech, economists said that the UK was “back on a familiar path of trade talk uncertainty”. Business leaders warned that the post-election boost could evaporate if talk turned to a “bare bones” Brexit.
The pound dropped 1.5 per cent against the dollar, falling 1.95 cents to $1.3005, and 1.2 per cent against the euro, down 1.4 cents to €1.1757. Against the dollar, sterling’s fall was the largest since December 17. The FTSE 100, which is dominated by dollar-earning companies, gained 40.30 points, or 0.55 per cent,