Sterling in steep fall over Michel Barnier’s Brexit transition comments

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The pound dropped abruptly on Friday morning after the EU’s top Brexit negotiator Michel Barnier warned that it is “not a given” that the UK and EU will be able to agree on a transition arrangement in time for the UK’s scheduled departure from the EU.

Sterling fell 0.8 per cent on the session to $1.3800, and lost 0.7 per cent against the euro with £0.8864 required for a unit of the single currency.

The pound had strengthened in recent months, accelerating on hawkish notes from the Bank of England this week, as investors were reassured by earlier signs that negotiations were making progress, reducing fears that the UK could endure a “cliff-edge” Brexit with no transition agreement in place.

However, Michel Barnier said Brussels and the UK have continued to clash over a number of key issues in talks this week.

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