Negotiations between the UK and the European Union to organise relations after the end of this year are at an impasse. Investors fear that the island kingdom is preparing for a hard Brexit, which has resulted in a weakening of the British currency.
The British pound lost more than one percent of its value against the dollar on Tuesday. At $1.3034 a pound, the island kingdom’s currency is the weakest since August 13. Against the euro, it was at a two-week low. Speculation is to blame, analysts say, that the UK is taking steps that will result in a hard Brexit at the end of this year, when the transition period ends after the UK formally ends its membership of the European Union.
The British are preparing to reopen the post-Brexit agreement, which has already been negotiated in previous months, according to Reuters and other media. There has been a warning from Brussels that if the UK tries to question what has already been agreed, the negotiations could end in failure. If this were to happen, trade between the EU and the UK would be subject to a World Trade Organisation regime, which could lead to the imposition of mutual tariffs on goods. But the deadline for reaching an agreement expires as soon as October.