Reuters.

By Yasin Ebrahim

Investing.com – The pound is on track for its biggest weekly fall in nearly six months on Thursday as the European Union threatened legal action against Britain if it does not drop a bill aimed at scuttling the Brexit divorce deal.

Down 1.56% at $1.2799, it is still on track for its biggest weekly drop since March 15.

The EU requires the UK to abandon the internal market bill before the end of the month, otherwise it may jeopardize the negotiations and legal action.

The bill, which was published on Wednesday, aims to establish common rules that would apply across the UK, including England, Northern Ireland, Scotland and Wales. It is likely to clash with key provisions of the withdrawal agreement, which requires Northern Ireland to follow EU rules in the post-Brexit period to avoid a hard border with the Republic of Ireland.

Cabinet minister Michael Gove insisted the country would not withdraw the bill.

The dramatic shift in the relationship comes just days after British Prime Minister Boris Johnson said Britain would walk away from negotiations if no deal is reached by the October 15 deadline for the European Council to meet.

Hopes for some progress in the latest round of trade talks are fading as both sides seem content to dig in their heels, while the prospect of Britain leaving the EU without a deal, known as a “hard Brexit”, is growing by the day.

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2020-09-10