LONDON (ICIS)--The UK's sterling pound fell sharply on Friday after the country's Prime Minister vowed to stick to her own Brexit strategy, despite the cold reception other EU leaders gave to the plan this week.
Theresa May had hoped positive comments by the EU's chief Brexit negotiator Michael Barnier earlier in September would lead to progress on her Chequers plan to leave the EU in March 2019.
However, several EU leaders said in a summit in Salzburg, Austria, on Thursday that many aspects of May's plan were unworkable.
The Prime Minister, however, said on Friday the EU had so far offered only two options regarding the economic relationship between the remaining 27 EU countries and the UK, with none of them valid, adding that her plan for a soft Brexit was still the best possible option to protect jobs.
On the one hand, she said the EU had offered a Norway-style agreement, where the country would remain part of the EU's Single Market and customs union.
"In plain English, this would mean we would still need to abide by all EU rules – uncontrolled immigration from the EU would continue and we could not do trade deals that we want with other countries. That would make a mockery of the referendum we had two years ago," said May.
The other offer from the EU was a free trade agreement (FTA) like those reached with third countries like Canada.
However, that plan would include the UK's Northern Ireland staying within the EU economic area, in order to avoid a hard border between it and the Republic of Ireland and thus preserving the Good Friday peace agreement.
Effectively, that option would force the UK to introduce a border between Northern Ireland and the rest of the country.
"It is something I will never agree to. If the EU believed I would, they are making a fundamental mistake ... It would mean breaking up our country," said May on Friday in Downing Street, her official residence.
"I have also been clear that the best outcome is to leave with a deal, that is why we proposed a third option, based on frictionless trade in goods, [which would be] the best way to protect jobs here and in the EU and avoid a hard border in Northern Ireland."
As progress on an agreed Brexit strategy stalls, corporate leaders in the UK continue stepping up pressure for the government not to leave the EU without a deal.
The country's chemicals trade group, the Chemical Industries Association (CIA), had not responded to a request for comment at the time of publishing.
The UK's largest trade group within the manufacturing sector said earlier on Friday that more than 80% of companies are unprepared for a no-deal Brexit, according to a survey among its members.
“Today’s research reinforces the need for manufacturers to get a deal to ensure they deliver for the UK economy. They also desperately require clarity to be able to prepare,” said trade group EEF's CEO Stephen Phipson.
“It is absolutely crucial that an industry that accounts for 10% of the UK’s economic output and almost half of the country’s exports, prepares for exit day and all its possible implications."
While May said on Friday she expects to leave the EU with a deal, she added that preparations for a no-deal scenario continue, although she addressed the 3m EU nationals living in the UK to assure them about their rights.
"The 3m citizens in the UK worried ... I want to be clear with you: even in the event of no-deal your rights will be protected - We want you to stay," she said.
She also promised the people of Northern Ireland to do "everything in our power" to prevent a return to a hard border, while she demanded "respect" from the other EU countries.
"Throughout this process I have treated the EU with nothing but respect. The UK expects the same."