Sterling sinks to 11-month low after Fox's no-deal Brexit remark
Prominent Brexiteer and trade minister Liam Fox puts odds of UK leaving EU without a trade deal at "60-40".
Monday 6 August 2018 12:11, UK
The pound sank to an 11-month low on Monday after trade minister Liam Fox warned Britain could crash out of the European Union without a trade deal.
Sterling fell half a cent to $1.2938, its lowest since 5 September last year. It fell 0.2% against the euro.
With less than eight months until Britain quits the bloc, the prominent Brexiteer put the odds of the UK leaving without a deal over their future relationship at "60-40".
Last year, he said a trade deal with the EU would be "one of the easiest in human history".
Dr Fox's comments come after the governor of the Bank of England warned the risk of the UK leaving the EU without a deal was "uncomfortably high".
Commerzbank currency strategist Ulrich Leuchtmann said: "The voices forecasting a hard Brexit are becoming increasingly shrill. The FX market is slowly beginning to work out that these people might successfully torpedo a constructive solution.
"I consider the Brexiteers' promise that the UK 'would enjoy unimaginable wealth' outside the EU to be nonsense."
If Britain fails to agree the terms of its divorce with the EU and leaves without even a transition agreement to smooth its exit, it would revert to trading under World Trade Organisation (WTO) rules in March 2019.
While many economists think WTO tariffs could cripple Britain's economy, Brexiteers believe the UK can prosper outside the EU after some short-term pain.