The British pound sank in mid-afternoon trading Thursday, following an announcement that after the fifth round of negotiations talks, little progress has been made between the UK and the European Union.
“We are in a position of deadlock”, the EU’s chief Brexit negotiator Michel Barnier said in a press conference following the latest round of meetings. The UK’s Brexit secretary David Davis was equally downbeat. He confirmed “no great step forward” had been made.
British pound nosedives
After gaining ground against the US dollar and euro during the morning UK trading period, the British pound sank from £1.326 to $1.314 in a matter of minutes during the press conference. Against the euro, meanwhile, sterling fell from £1.1172 to £1.1091, over the same period.
The news is a blow to the UK government ahead of next week’s EU summit. Prior to the latest round of negotiations, it had been hoped that enough progress would have been made to move forward to discuss post-Brexit plans, such as trade.
One major sticking point in talks appears to be on the movement of benefits, including the ability of EU citizens living in the UK, to vote in local elections and bring family members with them.
Progress expected in the future
Despite the disappointing outcome of the latest round of talks, Davis and Barnier both told their audience they were confident progress could be made in the next two months.
In addition to that, the UK’s Davis also seemed cautiously optimistic that the two groups were moving closer to agreeing the legal side of EU and UK citizens’ rights.
The British pound hit a 30-year low against the Us dollar in the aftermath of the 2016 Brexit vote and despite some fits and starts of positivity, remains close to those levels today. However, some analysts are considering the prospect of the pound losing further ground sooner, rather than later.