According to Press TV, Sterling dipped 1.1% to $1.2242 and €1.1004, respectively, as the probability of leaving the EU without a deal rises and threatens to halt business investment flowing into the UK.
Boris Johnson’s newly formed government has just announced an extra £2.1bn of funding to prepare for a no-deal Brexit – doubling the amount of money it has set aside this year.
“With 92 days until the UK leaves the European Union it’s vital that we intensify our planning to ensure we are ready… We want to get a good deal that abolishes the anti-democratic backstop. But if we can’t get a good deal, we’ll have to leave without one,” said Chancellor of the Exchequer Sajid Javid, announcing the move.
PM Johnson has previously said he is willing to take the UK out of the EU on 31 October – whether a Brexit deal has been agreed or not.
Moreover, the chancellor’s announcement of impending measures includes £344m to be spent on new border and customs operations, highlighting what experts say is a clash over the issue of Northern Ireland, which shares some 300 miles of border with the Republic of Ireland (an EU member state).
Any Brexit deal would mean that the UK would leave the EU single market and Customs Union, and the border would become a crossing point of goods leaving the UK and entering the Republic of Ireland.
The EU has demanded a backstop in Brexit negotiations that no matter what happens, there has to be an open border in Ireland, although with customs control points to stop UK products that fail to meet the bloc’s standards.
A hard border, experts say, would inflame hardcore dissident Republicans, hard-line Irish nationalists, who have vowed to carry out attacking symbols of British rule.
If the UK left the EU without a deal, London would sever all ties with immediate effect, with no transition period and no guarantees on citizens’ rights of residence.
Some are saying that the fall in the UK sterling is more a reflection of a weaker global economy and that even with a no-deal Brexit the UK can get on with things and start adopting a much more independent, self-confident, assertive role on the world stage.
Otherwise, the UK can hope to work through organisations such as the EU and push its economic leverage that way.