The pound has been volatile on Wednesday, losing almost 1 per cent of its value during exchanges in the House of Commons as the Government outlined its strategy on how the UK should leave the European Union.
Sterling had recovered some of its losses on Wednesday after enduring its worst four-day performance since the EU referendum as investors grew increasingly alarmed at the prospect of a severe rupture between the UK and the EU.
When Labour's shadow Brexit secretary, Keir Starmer, opened the debate just before 1pm, the pound stood at around $1.227.
But within minutes it began to fall, and by 2:30 pm it had touched $1.217 - a drop of 0.8 per cent.
It hit its lowest point during a speech by Brexit Secretary David Davis.
Davis promised to get the best possible terms for the UK as it leaves the EU, but refused to say whether it had ruled out retaining membership of the single market.
He said: “We have been pretty clear on the overarching aims. Not the detailed aims. We’re not even at the point that that’s possible."
The pound was trading below $1.22 against the dollar at 5pm, having earlier climbed as high as $1.2325 as the lift from the Government's earlier promise of a "full and transparent debate" on Britain's exit from the EU faded away.
Since the referendum on June 23, the pound has lost nearly 18 per cent of its value against the dollar.
What experts have said about Brexit
What experts have said about Brexit
1/11 Chancellor of the Exchequer Philip Hammond
The Chancellor claims London can still be a world financial hub despite Brexit “One of Britain’s great strengths is the ability to offer and aggregate all of the services the global financial services industry needs” “This has not changed as a result of the EU referendum and I will do everything I can to ensure the City of London retains its position as the world’s leading international financial centre.”
2/11 Yanis Varoufakis
Greece's former finance minister compared the UK relations with the EU bloc with a well-known song by the Eagles: “You can check out any time you like, as the Hotel California song says, but you can't really leave. The proof is Theresa May has not even dared to trigger Article 50. It's like Harrison Ford going into Indiana Jones' castle and the path behind him fragmenting. You can get in, but getting out is not at all clear”
3/11 Michael O’Leary
Ryanair boss says UK will be ‘screwed’ by EU in Brexit trade deals: “I have no faith in the politicians in London going on about how ‘the world will want to trade with us’. The world will want to screw you – that's what happens in trade talks,” he said. “They have no interest in giving the UK a deal on trade”
4/11 Tim Martin
JD Wetherspoon's chairman has said claims that the UK would see serious economic consequences from a Brexit vote were "lurid" and wrong: “We were told it would be Armageddon from the OECD, from the IMF, David Cameron, the chancellor and President Obama who were predicting locusts in the fields and tidal waves in the North Sea"
5/11 Mark Carney
Governor of Bank of England is 'serene' about Bank of England's Brexit stance: “I am absolutely serene about the … judgments made both by the MPC and the FPC”
6/11 Christine Lagarde
IMF chief urges quick Brexit to reduce economic uncertainty: “We want to see clarity sooner rather than later because we think that a lack of clarity feeds uncertainty, which itself undermines investment appetites and decision making”
7/11 Inga Beale
Lloyd’s chief executive says Brexit is a major issue: "Clearly the UK's referendum on its EU membership is a major issue for us to deal with and we are now focusing our attention on having in place the plans that will ensure Lloyd's continues trading across Europe”
8/11 Colm Kelleher
President of US bank Morgan Stanley says City of London ‘will suffer’ as result of the EU referendum: “I do believe, and I said prior to the referendum, that the City of London will suffer as result of Brexit. The issue is how much”
9/11 Richard Branson
Virgin founder believes we've lost a THIRD of our value because of Brexit and cancelled a deal worth 3,000 jobs: We're not any worse than anybody else, but I suspect we've lost a third of our value which is dreadful for people in the workplace.' He continued: "We were about to do a very big deal, we cancelled that deal, that would have involved 3,000 jobs, and that’s happening all over the country"
10/11 Barack Obama
US President believes Britain was wrong to vote to leave the EU: "It is absolutely true that I believed pre-Brexit vote and continue to believe post-Brexit vote that the world benefited enormously from the United Kingdom's participation in the EU. We are fully supportive of a process that is as little disruptive as possible so that people around the world can continue to benefit from economic growth"
11/11 Kristin Forbes
American economist and an external member of the Monetary Policy Committee of the Bank of England argues that the economy had been “less stormy than many expected” following the shock referendum result: “For now…the economy is experiencing some chop, but no tsunami. The adverse winds could quickly pick up – and merit a stronger policy response. But recently they have shifted to a more favourable direction”
This is a bigger fall than that seen during the 2008 financial crash, when the pound dropped 16 per cent.
It is almost as large as the devaluation triggered by Black Wednesday in 1992, when the pound plunged by 19 per cent after leaving the Exchange Rate Mechanism.
Michael Hewson of CMC Markets said that trying to find a natural level for sterling is going to be difficult in the short term.
Hewson said: “Due to the amount of political uncertainty being generated on both sides of the Channel, as both sides dance on the edge of the volcano, in laying out their negotiating positions, which for now appear a long way apart.”
Additional reporting by PAReuse content