Businesses still face the risk of a cliff edge Brexit at the end of the year given the short time available to negotiate a future trading relationship between Britain and the European Union, the EU’s chief Brexit negotiator said on Monday.
"This negotiation is not usual because at the end of this year, the UK is leaving the single market, it is it’s choice, it is leaving the customs union," Michel Barnier told a joint news conference with Irish Prime Minister Leo Varadkar.
"If we have no agreement, it will not be business as usual and the status quo, we have to face the risk of a cliff edge, in particular for trade."
Interest Rate Decision
Elsewhere, Britain's pound was broadly steady on Monday ahead of a key Bank of England interest-rate decision later this week that many analysts see as too close to call.
While weak economic data and dovish comments from BoE policymakers have fuelled speculation that the central bank could cut rates as its Jan. 30 policy meeting, upbeat economic numbers in recent days have cast doubt on that view.
For instance, Friday's early readings of the IHS Markit/CIPS UK Purchasing Managers' Index (PMI) showed Britain's vast services sector returned to growth in January for the first time since August, while a downturn in manufacturing eased.
In early Monday trade, sterling was steady at $1.3077 , holding below a more than two-week high touched briefly on Friday at $1.3180.
Against the euro, sterling hovered at 84.38 pence -- a touch softer on the day.
"This (BoE) meeting follows a run of fairly weak economic data over the last few weeks but with last week’s strong employment data and better than expected flash PMIs confusing the picture," said Deutsche Bank strategist Jim Reid.