The U.K. pound slumped to a five-month low against the dollar Friday after talks between the government and its main opposition aimed at finding a way through the country's Brexit deadlock collapsed, setting up the prospect of a no-deal exit from the European Union.
Opposition Labour Party leader Jeremy Corbyn pulled out of Brexit talks with Prime Minister Theresa May, and said he wouldn't support her attempt to pass her rejected bill in Parliament over the coming weeks, in a letter published Friday.
Corbyn said that while talks had been "conducted in good faith on both sides", Conservative Party attempts to force the Prime Minister to either resign immediately or indicate a firm date for her departure have made a bi-partisan Brexit agreement impossible.
"It has become clear that, while there are some areas where compromise has been possible, we have been unable to bridge important policy gaps between us," Corbyn wrote. "Even more crucially, the increasing weakness and instability of your government means there cannot be confidence in securing whatever might be agreed between us."
Corbyn also said that, without "significant changes" to May's thrice-defeated Withdrawl agreement, which sets out the terms of Britain's EU departure, "we will continue to oppose the Government's deal as we do not believe it safeguards jobs, living standards and manufacturing industry in Britain."
The pound was marked 0.2% lower on the session following Corbyn's letter to the Prime Minister, extending a week-long decline of 1.85% to take the pound to 1.2759, the lowest since January 10.
May was granted a second extension to Britain's original March 29 Brexit deadline last month by European Council President Donald Tusk, who urged her to "please don't waste this time" as he agreed to a flexible October 31 deadline.
Since then, however, little progress has been made by May in her attempt to find cross-party support for her Brexit deal, while at the same time EU exiting supporting lawmakers have increased pressure on her to resign, citing dismal polling data and a humiliating defeat in local elections earlier this month.
May will attempt to pass her unpopular bill -- which she insists is the only workable solution to the Brexit impasse -- during the same week she is expected to host a controversial state visit from U.S. President Donald Trump, who will take and audience with Her Majesty Queen Elizabeth II to mark the 75th anniversary of the D-Day military effort during the Second World War.