The pound is tanking as Theresa May's speech deepens Brexit crisis

September 21, 2018 at 09:19 AM EDT

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The pound dived as Theresa May delivered a speech signalling the UK is moving closer to a hard Brexit.
The pound was down as much as 1.4% against the dollar as the speech progressed.
"I will not overturn the result of the referendum, nor will I break up my country," May said in a speech at Number 10 Downing Street.

LONDON — The pound dropped sharply on Friday afternoon after British Prime Minister Theresa May said that the UK and EU have reached an impasse in Brexit negotiations, and accused the European Union of a lack of respect.

"I will not overturn the result of the referendum, nor will I break up my country," May said in a speech at Number 10 Downing Street just after lunchtime in London.

May warned that Britain may be heading towards a no deal Brexit, saying: "We must and will prepare ourselves for no deal.

"Anything which fails to respect the referendum or which effectively divides our country in two would be a bad deal and I have always said no deal is better than a bad deal," she said.

Markets interpreted May's words as making a hard Brexit more likely. As May's speech ended, at around 2.10 p.m. BST (9.10 a.m. ET), the pound was down 1.4% against the dollar and around 1% against the euro.

Here's the chart of the pound's movement against the dollar:

May's speech followed a summit with EU leader on Thursday, which had initially been billed as a chance for European leaders to offer Theresa May words of support and shore up backing for a Brexit deal at home.

That scenario did not materialise and the summit turned into a tit-for-tat war of words between the two sides of negotiations. Donald Tusk, the European Council president, said after the summit that May's proposals "will not work."

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