“With the premier signaling that a crackdown on immigration took precedence over membership of the bloc’s single market and European leaders hardening their position, traders responded by driving the pound to its lowest against the dollar since 1985. Following an overnight plunge in Asia, the currency is wrapping up its worst week since the June Brexit vote.
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Signs that the divorce talks — and terms — were likely to be bitter emerged in the annual Conservative party conference that ended Wednesday.
An aide to Brexit Secretary David Davis outlined what he called red lines for the U.K., positions that Europeans were bound to reject. He said Britain renounced any contribution to the EU budget; jurisdiction of the European Court of Justice; free movement of labor; and any interference with British lawmaking.
Leaders of France and Germany responded in kind. The EU position is that free movement of people, goods, services and capital are inseparable. “There has to be a price to pay,” said French President Francois Hollande on Thursday. Hours earlier, German Chancellor Angela Merkel warned “there will be no easy negotiations,” signaling a growing reluctance to grant any special terms to the U.K. post-Brexit.
For her part, May said while she wanted “the best deal possible with the EU” on trade she argued she isn’t taking her country out of “the European Union only to give up control of immigration again.”