Sterling plunges to six-month low as no-deal Brexit worries build

Brexit jitters and recent poor British economic data have been keeping sterling subdued and near its lowest levels in years

Boris Johnson and Jeremy Hunt taking part in a debate on Monday night. Photograph: Louis Wood - WPA Pool/Getty Images

Boris Johnson and Jeremy Hunt taking part in a debate on Monday night. Photograph: Louis Wood - WPA Pool/Getty Images

 

The pound sank to a six-month low against the euro on Tuesday after a debate between the two candidates vying to be Britain’s next prime minister re-ignited worries about a no-deal Brexit.

Both frontrunner Boris Johnson and his rival Jeremy Hunt said late on Monday that they would not be willing to accept the backstop element of Theresa May’s Brexit deal, which is one of Brussels’ principal demands in Brexit negotiations.

The backstop is an insurance policy designed to prevent the return of a hard border between the Republic and Northern Ireland.

Brexit jitters, coupled with recent poor British economic data, have been keeping sterling subdued and near its lowest levels in years.

The British currency weakened 0.4 per cent on Tuesday to $1.2463 , a six-day low. If it drops below $1.2439 it would sink to its lowest in more than two years, excluding the “flash crash” on January 3rd when it dropped to $1.2409.

Against the euro it fell 0.3 per cent to a low of 90.225 pence, the lowest since January 11th. – Reuters