Sterling jumped against the dollar and the euro on Friday, after more positive indications on Brexit progress from the EU.
The pound rose almost 0.7 per cent against the dollar and more than 0.6 per cent against the euro, to $1.3015 and €1.1192 respectively, after the EU’s chief negotiator Michel Barnier said the bloc was committed to finding a positive deal with Britain.
Mr Barnier said: “We want to establish the closest relationship possible with your country - and I will be saying this in greater detail later - and what will be an unprecedented relationship. We are determined to find an agreement. Let me repeat also that the no-deal scenario is not our scenario."
On Thursday, fears that a no-deal Brexit was becoming more likely were raised again as the UK refused to table a plan for a Northern Ireland border backstop.
Brussels and Ireland have both said they would not accept a withdrawal agreement without a backstop in it to prevent a hard border between Northern Ireland and the Republic of Ireland under any circumstances.
Documents published on Friday revealed that Mr Barnier is open to finding a solution that would “de-dramatise” the backstop, and said the EU is open to the prospect of certain, simplified checks on the border.
He added that the Irish border remains the top priority when it comes to negotiations.
“Brexit without a backstop would create a problem for Northern Ireland, and the inhabitants of the island of Ireland we think are entitled to some certainty regarding the conditions for future co-operation between the two countries,” he said.
“Ireland remains the crucial issue if we are to get an agreement, but if there is no operational backstop on Ireland, there will not be an agreement.”
