Labour leader Jeremy Corbyn has said cross party talks with the government over Brexit “have gone as far as they can.”
Corbyn said in a letter to Theresa May, the six weeks of cross party talks cannot continue due to, “the increasing weakness and instability” of her government.
“It has become clear that, while there are some areas where compromise has been possible, we have been unable to bridge important policy gaps between us.
“Even more crucially, the increasing weakness and instability of your government means there cannot be confidence in securing whatever might be agreed between us.
“As you have been setting out your decision to stand down and cabinet ministers are competing to succeed you, the position of the government has become ever more unstable and its authority eroded.”
He also said, “not infrequently, proposals by your negotiating team have been publicly contradicted by statements from other members of the cabinet.”
David Frost, London Chamber of Commerce and Industry chief executive said, “I was always doubtful that cross-party talks could reach a conclusion and even more doubtful that any plausible outcome from them would have been good for the longer-term business environment in London and the UK.
“There are still a number of factors at play and no doubt more will emerge, so it is vital that the time between now and 31 October is not wasted.
“For example, a Conservative Party leadership election is now looking very likely: if so, we would urge it to be conducted as expeditiously as possible to avoid a further period of uncertainty into the summer and beyond.
“Businesses need Parliament to find a way through, and in the meantime need continued practical help about no deal preparation, since that outcome remains a distinct possibility, and isn’t just a matter for the UK to decide upon.”
As news of the talks have collapsed sterling fell from a high of $1.279 to $1.276.
Simon Harvey, FX Market Analyst at Monex Europe said, “The Brexit bellwether that is the pound shows how bleak the current political situation is in the UK. Today’s sterling move comes as the final layer of support, in the form of cross-party talks bearing fruit, is stripped away.
“Risks are currently tilted to further sterling depreciation, regardless of whether the Withdrawal Agreement is ratified or not. If the agreement is passed, which remains a slim chance at best, it is unlikely that Theresa May will stay on as prime minister at a crucial juncture in the Brexit process.
“May’s abdication would increase the chances of a Brexiteer such as Boris Johnson or Dominic Raab taking over the reins and potentially imposing a harder Brexit with the political declaration still left to play for. However, this scenario would likely prove unpalatable for most MPs in Westminster and would increase the chances of a vote of no-confidence being triggered in Parliament.
“Sterling has a track record of not faring too well in the run-up to such events as uncertainty increases. Alternatively, the Withdrawal Agreement could fail to make it past lawmakers for the fourth time this year, something that seems to be the market base case at present. Another failed attempt by May would surely put the finishing touches on her tenure, with the 1922 committee likely to intervene.
“The heightened political anguish continues to suppress sterling. The recent move in EURGBP is quite telling about how entangled the pound is with political uncertainty, especially given the general depreciation of the euro recently.
“Markets have recently been pricing out the prospects of a customs arrangement and in turn a resolution to Brexit in the short-term. How far sterling continues to fall depends on the decisiveness of the Tory party in replacing May and whether that brings a heightened threat of a general election.”