Investors reacted with shock after hearing the newly elected UK Prime Minister Boris Johnson on the possibility of a no-deal Brexit, causing the pound to dip to a 28-month low.
The sterling has fallen against the euro to below €1.10 while it has also dropped below €1.23 against the US dollar.
In the meantime, British media report confusion within Mr Johnson’s government about whether a no-deal Brexit should be the main focus of his cabinet.
Mr Johnson insisted there was an “assumption that we [the UK] can get a new deal,” adding that he wished to speak to European leaders.
This runs counter to his deputy official spokeswoman, who insisted the cabinet must assume that there will be a no-deal Brexit on 31st October, unless negotiations reopen, and the EU considers reopening up the withdrawal agreement negotiated with former PM Theresa May.
The Guardian reports that Mr Johnson’s spokesperson will however not meet any EU leaders until they agree to renegotiate a deal which does not involve the Irish backstop.
The British Chambers of Commerce stressed that they have yet to receive answers or instructions on how to best prepare for the looming deadline, with many sounding the alarm regarding the impact this uncertainty will have on the economy.
A weaker British pound is also likely to irritate the public further due to it being holiday season and many UK nationals will be looking to convert pound to euros ahead of their holidays.