Sterling plummeted against the euro and US dollar this afternoon as the likelihood of Boris Johnson taking Britain out of the EU with a No-Deal increased.
The pound dropped to €1.0981 (euro) by 4pm, according to Pound Sterling Live, which is the lowest figure since €1.0793 of August 2017.
The pound also slipped to $1.2230 (US dollar) this afternoon, the lowest since $1.2153 in March 2017.
The exchange rates slump comes just days after a currency analyst told Daily Star Online that Brit holidaymakers should buy their holiday money quickly.
Michael Brown, a senior currency analyst at Caxton FX, told us the day before Boris Johnson won the keys to 10 Downing Street that rates could fall amid fears of Boris’s plan for a No-Deal Brexit.
The sterling remained steady after Boris was announced as the new Tory leader and prime minister, but it has now plummeted as the prospect of a No-Deal increases.
It comes after senior figures in Johnson’s cabinet sent shockwaves through investors, including a suggestion from his new foreign secretary Dominic Raab this morning that the UK would be in a better place to negotiate a good deal with the EU after a No-Deal Brexit.
He told BBC Radio 4’s Today programme that the EU’s “stubborn” behaviour would be responsible if the UK left without an agreement with Brussels on October 31 as vowed by Boris.
And over the weekend, more key figures in Johnson’s government said the PM was “turbo-charging” preparations for no deal.
Michael Gove, the new cabinet minister in charge of planning for such a scenario, said the government was operating on the assumption of leaving without a deal.
Currency analyst Michael Brown had previously told Daily Star Online, on the eve of Boris’ premiership, that: “There’s no certainty with the pound right now as it is especially vulnerable to the on-going political uncertainties and developments related to Brexit.
“It fell to a more than two-year low against the US Dollar last week as markets began to once again price in the risk of a no-deal Brexit further to comments from Boris Johnson that the Irish backstop is ‘dead’, and reports that the suspension of Parliament to force through a no-deal Brexit was under consideration.
“Sterling’s struggles were not limited to the dollar, with the pound tumbling across the board, including reaching a fresh 6-month low against the Euro.
“Looking ahead, the outlook for the pound remains as cloudy as ever, with almost every potential Brexit outcome, from no-deal to no-Brexit and possibly a hard Brexit on the table.
“The pound is likely to remain on the downside against both the Euro and Dollar, with ongoing uncertainties set to keep a lid on any increases should they occur.
“In a worst case scenario where we are faced with a hard Brexit, the pound could fall another 10 -15 % against both currencies.
“With all this uncertainty, holidaymakers can hedge their bets and protect themselves from the on-going currency volatility against the Pound by exchanging half their currency now, half later. That way, whether the rate goes up or down, they can benefit from a higher exchange rate on at least half the amount.”