Pound drops amid fears UK will break Brexit deal
The pound to euro conversion rate has dropped two centimes since Monday morning amid concerns that the UK is about the break the terms of the Brexit Withdrawal Agreement.
It comes as an EU commissioner has called for an urgent ‘extraordinary’ meeting of the joint committee that overseas the Withdrawal Agreement (WA) deal.
The pound was at €1.12 on Monday, where it had been for around 10 days, when rumours surfaced that a forthcoming Internal Market Bill would break certain terms of the WA, an international treaty between the UK and EU which forms the basis for Brexit.
This was said to concern aspects of the Northern Ireland Protocol (measures for the Ireland / Northern Ireland border after the Brexit transition period).
The pound to euro value then dropped markedly and is now at €1.10 after a dip to a low of almost €1.09 earlier today (these figures refer to mid-market rates as shown at xe.com and are better than those available to individuals).
Today’s drop came as the controversial bill had a first reading in the House of Commons, its introduction to Parliament. In publishing it the British government stated that it “remains fully committed to implementing the Withdrawal Agreement and Northern Ireland Protocol.”
However yesterday the UK’s minister for Northern Ireland, Brandon Lewis, told MPs that the bill would “break international law in a very specific and limited way”.
European Commissioner Ursula von der Leyen has said she is “very concerned” by the developments.
Very concerned about announcements from the British government on its intentions to breach the Withdrawal Agreement. This would break international law and undermines trust. Pacta sunt servanda = the foundation of prosperous future relations.— Ursula von der Leyen (@vonderleyen) September 9, 2020
Her colleague Maros Sefcovic, one of the commission’s vice presidents, has called for an urgent meeting.
We expect the letter and spirit of the #WithdrawalAgreement to be fully respected. I have called for an extraordinary EU-UK Joint Committee to be held as soon as possible - so that our UK partners elaborate and respond to our strong concerns regarding their announcement. pic.twitter.com/MhhWj9MUnC— Maroš Šefčovič (@MarosSefcovic) September 9, 2020
France's former Europe Minister, MEP Nathalie Loiseau, has also entered the debate, telling BBC Radio 4 today that “[Boris Johnson] promised to put a tiger in the tank, but he’s put an elephant in the china shop”.