Pound dips amid breakdown in Brexit talks

Theresa May scrambles to rescue Brexit deal as DUP refuses to back down

As Prime Minister Theresa May struggles to get an agreement from the Democratic Unionist Party (DUP) on the status of the Irish border when the UK leaves the EU, the pound dropped today amid uncertainty over Brexit talks.

The pound dropped 0.7 per cent against the dollar today morning to $1.3390 but then recovered partly to stand 0.4 per cent lower at $1.3420.

Irish Prime Minister Leo Varadkar had said yesterday he was “surprised and disappointed” a deal had not been reached. He has also said that the Republic of Ireland could not go into a second phase of Brexit talks without “firm guarantees that there will not be a hard border in Ireland”.

According to BBC, it has now been learnt that the Irish government wants to give May time and space to manage “difficult political issues”. Foreign Minister Simon Coveney has said that the Irish government would work with the British government on issues around the text of the agreement. But he said they would not reverse out of an agreement they felt was secured.

The Prime Minister had met presidents Juncker and Donald Tusk in Brussels yesterday to decide whether “sufficient progress” has been made to start Phase 2 negotiations of trade talks.

May pulled out of the deal, which could have kick-started trade talks, after meeting fierce resistance from the DUP. The Irish party has 10 MPs at Westminster and May needs this support for a majority to win votes in the House of Commons.

The UK is due to leave the EU in March 2019.

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