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What would a no-deal Brexit do to the value of the Pound?

Most economists believe that if the UK leaves the EU without a deal in October it will damage our economy - the only disagreement is over the scale of the damage.

The CBI warned today businesses aren’t ready and that no deal will cost jobs and growth.

Vauxhall warned it could lead to the closure of its car factory in Ellesmere Port.

Boris Johnson today put the odds of a no deal Brexit at a “million to one”.

A glance at the financial markets will tell you that investors believe the probability of no deal is far higher and rising.

Sterling has been on the slide against the Euro since early May when Theresa May failed to force the EU Withdrawal Bill through parliament for a third time.

£1 is now worth €1.09. Credit: PA

It continued heading South during the Tory leadership contest as both candidates talked uncompromisingly about a hard Brexit and today the pound reached new lows against both the Euro and the Dollar.

If you’re about to head off on holiday £1 is now worth €1.09 - you’ll get far less than that if you’re changing your money at the airport.

The government insists that Plan A is to leave the EU with a deal, but it is refusing to begin talks unless the EU agrees to reopen the Withdrawal Agreement and scrap the backstop.

The EU is refusing to do either and so the government says it is“turbo charging” preparations for Plan B - leaving without a deal on October 31st.

Investors are increasingly worried that Plan B will become Plan A.

What next? Well, the pound may have further to fall which will put upward pressure on prices. The Bank of England’s job is to keep inflation low and stable but don’t bet on it intervening by raising interest rates.

All the latest data suggests that the economy is barely growing.