Pound sterling remains under pressure over no deal Brexit concerns

Currency weakened after comments from senior politicians and economists pointing to possibility of no deal between the UK and EU

Pressure on the pound due to fears a no deal Brexit is becoming more likely continued on Thursday morning, as sterling traded down against the dollar and the euro.

The pound was down 0.24 per cent at $1.2854, after dipping below $1.29 for the first time in 12 months on Wednesday.

Meanwhile, the currency was also slightly lower against the euro, at €1.1093, although it regained some ground lost in the previous session.

Sterling has been on a downward trajectory since Liam Fox, the international trade secretary, said last weekend that the probability of a no deal Brexit was now “60-40”. His remarks compounded concerns voiced by Bank of England boss Mark Carney last week. The Bank’s governor said the chances of a no deal Brexit were “uncomfortably high”.

Connor Campbell, financial analyst at Spreadex, said: “The fears of a ‘no deal’ Brexit have really gathered steam in the last few sessions, a snowball effect stemming from Mark Carney and Liam Fox’s warnings either side of the weekend.”

The FTSE 100 benefited from the weak pound on Wednesday, finishing the day up 0.4 per cent.

However, on Thursday analysts noted that a dip in sterling was not enough to keep the index up, and it fell 0.6 per cent in morning trading.