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Sterling slumped to an 11-day low on Friday after Mark Carney claimed the chance of a no-deal Brexit is now “uncomfortably high”.

The Bank of England Governor said financial institutions have been “stockpiling” to withstand a potential shock.

Asked if a no-deal scenario would be a disaster, Mr Carney said: “It is highly undesirable. The possibility of a no-deal is uncomfortably high at this point.”

Mr Carney also claimed our economy is 2% smaller than it would have been if Remain had won the 2016 referendum.

His controversial comments triggered a 0.3% fall for the pound, to $1.2975.

(Image: Getty)

They also came as PM Theresa May cut her holiday in Italy short to hold talks with French President Emmanuel Macron on her Chequers plan.

Remainer Labour MP Chris Leslie said: “Mark Carney has confirmed Brexit has already done damage to the British economy and threatens to do much more.”

(Image: PA)

Meanwhile, Chief of the Defence Staff General Sir Nick Carter was asked about reports that the Army is being put on standby to deliver food and medicine in a no-deal Brexit.

He told the BBC: “The armed forces are always doing contingency planning but we’ve not been asked that specific question.”