Reuters.

Yasin Ebrahim

Investing.com – The pound fell sharply against the dollar on Tuesday as Prime Minister Boris Johnson raised fears of a no-deal Brexit after warning that Britain would end negotiations if there was no progress towards a deal by mid-October.

It fell 1.35% to $1.2988.

Johnson said a deal needed to be reached by the October 15 deadline for the European Council to meet or warned Britain would walk away from the negotiating table.

The tough talk is feared to be more than just a negotiating tactic, as Britain has angered EU members by unveiling plans to introduce a law aimed at undermining the withdrawal agreement, which has been signed into law and sets out the terms of Britain’s exit from the EU.

The internal market bill, which aims to establish common rules applicable to the whole of the UK, may clash with the terms of the withdrawal agreement, which requires Northern Ireland to follow EU rules to avoid a hard border with the Republic of Ireland after Brexit.

Britain’s move appears controversial as talks resume on Tuesday with Michel Barnier, the EU’s chief negotiator, who arrived in London. The EU has said it will be ready for a no-deal Brexit when the transition period ends on Dec. 31.

“No deal is the most likely and only outcome of the negotiations,” warned former European Commission President Jean-Claude Juncker.

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2020-10-02