As the pound fell to a two-year low, Boris Johnson said he still believed that a no-deal Brexit was a million-to-one possibility

Sterling fell to its lowest level for more than two years yesterday as financial traders began to price in the likelihood of a no-deal Brexit to the value of the pound.

In a hardline stance that spooked the markets, Downing Street ruled out any new Brexit talks until the European Union had publicly committed itself to scrapping the Irish backstop. Sterling dropped as much as 1.3 per cent against the dollar to $1.2230, a level not touched since Theresa May triggered Article 50 in March 2017. By this morning it had fallen further, to $1.2173 and €1.0923.

The pound has been the worst-performing major currency since Boris Johnson entered Downing Street last week, with traders predicting further falls in the coming weeks.

Yesterday’s sell-off