The GBP fell sharply after the government’s senior law officer said the legal risk of the being ‘tied’ to the EU rules after Brexit remains ‘unchanged’

According to Geoggrey Cox, MP, the UK may not be able to leave the Irish backstop without the EU’s agreement.

The Great British Pound fell 3p within a few minutes, from £1.17 to £1.15 against the EURO, however, the pound went back up within the hour to £1.16 against the euro.

Simon Derrick, managing director of BNY Mellon, said the fall in sterling reflected increased uncertainty over the Brexit process.

“The market believes it increases the likelihood of a ‘no’ vote tonight,” he said.

“It complicates the issue, it leaves us with the possibility still of a no-deal Brexit, and uncertainty over politics more generally. It muddies the water.”

Theresa May said she had obtained “legally binding” changes to her Brexit deal which addressed the possibility of the temporary divorce arrangement known as the “backstop” becoming permanent if the UK wished to end it.