The pound has sunk in early trading today ahead of a Boris Johnson speech in which the Prime Minister is expected to demand a looser trade deal with the EU that could spell a hard Brexit.
Sterling fell 0.73 per cent against the dollar to $1.3103 by 9.30am ahead of the Prime Minister’s speech. Johnson is set to start UK-EU trade deal negotiations today with the aim of securing a Canada-style free trade deal.
But if the parties fail to secure a deal by the end of 2020, Johnson is set to say the UK will effectively fall back on World Trade Organization terms in a hard Brexit.
While a Canada-style deal would enable tariff-free and quote-free trade on goods, a WTO-style deal would buck City expectations of tighter alignment with the EU.
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