Britain's pound has fallen to its lowest level since the so-called October Flash Crash as investors count the cost of the country's divorce from the European Union and its impact on the world's sixth-largest economy.

The pound fell as much as 1% against the U.S. dollar to trade at $1.2055 by 15:45 p.m. GMT, extending a three-day decline that has cut more than 1.85% of the currency's value in the wake of remarks from Prime Minister Theresa May that suggested the government was leaning towards a "hard Brexit" from the EU -- a divorce that favors curbing immigration over preserving single-market access.

The move pegs the pound at the lowest level against the dollar since the "Flash Crash" of Oct. 7, when a suspected trading error caused the currency pair to change hands at 1.1985. Stripping that errant transaction from the data, however, and you will need to go all the way back to 1985 to find a lower trading level. 

The currency was also pushed down by a widening trade deficit, which swelled to £12.2 billion in November as imports grew by £3.3 billion while exports rose by £700 million, according to data from the U.K.'s Office for National Statistics, which appeared to dispute claims that a devalued currency would make British goods more attractive to overseas customers.

The road to Brexit has not been smooth for the government and reports today reveal that cabinet ministers think they are likely to lose a court case that could hamper May's March 2017 timeline for triggering the Article 50 exit clause starting the on a two-year transition out of the EU.

In what was considered a landmark constitutional case, the Supreme Court heard an appeal to a lower court ruling that found the prime minister did not have the unilateral right to trigger the exit from the European Union. The Guardian Wednesday reported that senior government officials are convinced that a majority of the judges will uphold the High Court's ruling, forcing the prime minister to go to parliament for consent to trigger an exit.

When the Supreme Court is set to deliver its decision is unknown. It was reported that the government has prepared motions to put before lawmakers.

Meanwhile, on Tuesday the government faced pressure from business leaders for a delay to Brexit to adjust to new trading arrangements between the U.K. and the EU.

Heads of financial institutions including HSBC  (HSBC) and the London Stock Exchange told a treasury select committee that a five-year transition period from when Article 50 is triggered should be put in place to avoid risk of a systemic crisis in the derivative market.

The leaders, including HSBC chairman Douglas Flint, warned that the uncertainty surrounding the Brexit negotiations and deal was hurting business and asked for more clarity.

"Uncertainty as to where we are going to end up would trigger people thinking earlier about moving jobs, to give themselves access to the passport, the right to do business in Europe," Flint told lawmakers.

Allianz Global Investors vice-chair Elizabeth Corley said that a transitional deal was needed due to the complexity of checking and renegotiating contracts.

However, in parliament today the prime minister said she would not be deterred from her timetable. May, who has yet to give a comprehensive statement on Brexit, spooked markets after appearing on a Sunday morning political show.

"Often, people talk in terms as if somehow we are leaving the EU, but we still want to kind of keep bits of membership of the EU," May said in an interview with Sky News on Sunday. "We are leaving. We are coming out. We are not going to be a member of the EU any longer."

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