No-deal Brexit: Holidaymakers and pensioners hit in pocket as pound falls to two-year low
Summer holidaymakers heading to Europe will feel the pinch as sterling slid to a 28-month low on Monday after new Prime Minister Boris Johnson’s government said it now assumed there would be a no-deal Brexit.
Sterling fell below $1.23 against the US dollar. The pound had been trading at $1.50 on the day of the 2016 referendum.
It also fell sharply against the euro - down by around 0.8 percent to €1.10 on international currency markets on Monday as Johnson's government ramped up its no-deal rhetoric.
Following the vote to leave the EU, the pound fell sharply. In the weeks following the referendum the pound fell by 10.4 percent against the Euro from €1.3017 on June 23rd to €1.16 on July 6th 2016. It has been up and down since then will likely fall further as the UK approaches a cliff-edge on Brexit on Halloween.
Analysts say comments from new Foreign Secretary Dominic Raab had helped push down the value of the pound.
He said the UK would be in a better position to negotiate with the EU after a no-deal Brexit and said the "stubborn" EU would be to blame if the UK and Europe parted ways without a deal.
Johnson’s is gambling on his hope that the threat of a no-deal Brexit on October 31st will persuade the EU’s biggest powers - Germany and France - to agree to revise the Withdrawal Agreement that former Prime Minister Theresa May agreed last November but failed three times to push through the British parliament.
It was also reported on Monday that Johnson is refusing to sit down with EU leaders until they show signs of agreeing to drop the Irish backstop.
Johnson has been invited for talks with Germany's Angela Merkel and French President Emmanuel Macron, but so far no dates are in the diary.