Sterling could crash to parity with the euro and just $1.20 against the dollar if Britain fails to secure a deal with the EU before March next year, according to a senior executive at a leading wealth management company.

The warning by Cesar Perez Ruiz, chief investment officer at Pictet, comes amid renewed concern about a breakdown in negotiations. The EU’s draft proposals include a demand that Northern Ireland remain in the customs union if no workable solution to the Irish border question can be found. The suggestion was swiftly rejected by Theresa May, who said: “No UK prime minister could ever agree to it.”

The pound fell 1.27 cents against the dollar afterwards. Yesterday it dropped another 0.22 cents to $1.3737. Against the euro,