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Pound falls on Barnier's Brexit transition warning

Sterling falls against dollar and euro as European Union's Brexit negotiator Michel Barnier says transition deal is 'not a given'.

Pound falls on Barnier's Brexit transition warning
 

The pound has fallen after the European Union's Brexit negotiator Michel Barnier warned a transition period after the UK's exit from the European Union was 'not a given'.

The pound sell 0.6% against the dollar to $1.383, while the euro jumped 0.7% against sterling to 88.7p.

Speaking after a week of discussions between UK and EU negotiators, Barnier said 'substantial' disagreements remained over rights for EU nationals and the status of new EU laws during the transition period.

Prime minister Theresa May has called for a two-year transition period after the UK's exit from the EU, set to take place in March next year, and has agreed to make payments to the EU's budget until 2021.

'It looks like it may be a torrid end to the week for sterling as it comes under renewed Brexit pressure,' said Hamish Muress, currency analyst at OFX.

'Over half of the gains the pound has made since the star of the year against the dollar have been wiped out. With Brexit once again moving back onto the markets' radar, risk of a sterling downturn has returned and even the Bank of England's aggressive policy outlook hasn't provided much support to the pound.'

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