BORIS Johnson may be a friend of those Little Englanders who are hell-bent on Brexit, but sterling is, it appears, far less of a fan of the Conservative leadership contest front runner.

Sterling was firmly on the ropes at the start of this week as financial market players reacted to what they saw as a further increase in the chances of Mr Johnson becoming prime minister. Former leadership contender Matt Hancock had on Sunday night backed Mr Johnson, who has anchored his campaign on a pledge to leave the European Union on October 31, with or without a deal.

Growing fears of a no-deal Brexit have been highlighted in recent days by a poll of economists, and the perceived increase in the chances of a disorderly departure has been flagged by the Bank of England. Meanwhile, the Bank is now projecting the UK economy will have stagnated over the current quarter.

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A poll by Reuters between June 11 and 14 showed the median probability attached to a no-deal Brexit by economists had climbed to 25 per cent, from 15%, amid the ongoing Conservative leadership battle. This is no surprise, given Mr Johnson’s seemingly categoric declaration of his intent in relation to the Hallowe’en deadline, although an assessment of the probability of a no-deal departure also has to incorporate a view of how Parliament would be likely to react to his depressingly gung-ho approach.

A campaign video this month from the former foreign secretary shows him telling a member of the public: “If I get in we’ll come out, deal or no deal, on October the 31st.”

As financial markets focused on Monday on Mr Johnson’s prospects, the pound dropped to its weakest against the US greenback since early January, dropping as far as $1.2532 after the market close. And sterling on Monday hit a five-month low against the euro – with the single currency trading close to 89.5p that evening.

Sterling received a modest boost on Tuesday and Wednesday as financial markets focused on this week’s meeting of the Bank of England’s Monetary Policy Committee and on recent warnings about possible future rises in UK interest rates.

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However, the fact remains that the pound has plunged sharply in recent weeks as outgoing prime minister Theresa May’s grip on power slipped and Mr Johnson and some other big fans of Brexit stepped into the limelight.

The euro was yesterday trading above 89p. It was trading around 85p in early May.

Sterling was trading around $1.32 in early May. And the pound is far adrift of the near-$1.50 levels at which it traded on June 23, 2016, ahead of the EU referendum result.

If this were not such a serious matter, in terms of the damage caused by any form of Brexit to people’s living standards, it might be difficult not to laugh at the ridiculousness of it all as the Tory leadership circus continues, with all its very British bravado. Mr Johnson is giving the impression that he actually believes he will be able to force the EU’s hand with grandstanding and an ultimatum.

But he should surely keep in mind the projections from a vast array of heavyweight institutions, think-tanks and economists of the huge damage that would be done to the UK economy by a no-deal Brexit. Even the Tory Government’s projections spell out the catastrophic impact.

The EU appears at pains to avoid a no-deal exit. It has not only bent over backwards but tried various other contortions as it has attempted to understand what on earth the UK hopes to achieve with Brexit and thus work up a potential agreement.

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However, more than three years on from the June 2016 Brexit vote, the awesome patience of the EU’s leaders and the heads of some member states looks to have worn very thin indeed. And it is crucial to remember that a no-deal Brexit, while disastrous for the UK, would be more of a short-term inconvenience for continuing EU member states.

Meantime, in a Scottish and broader UK context, Brexit grimness hangs over everything.

The Bank of England, announcing the MPC’s widely expected decision to hold UK base rates at 0.75% at its meeting this week, yesterday warned “the perceived likelihood of a no-deal Brexit has risen”.

And let us not forget that businesses were nervous enough even before the latest chapter in this sorry saga, the comeback of Mr Johnson. Business investment fell for four consecutive quarters in 2018.

The Bank of England now forecasts UK growth will grind to a halt in the second quarter, expecting stagnation over this period rather than the albeit weak 0.2% expansion it had projected previously. It warned “downside risks to growth have increased”. And the Bank observed: “Increased Brexit uncertainties have put additional downward pressure on UK forward interest rates and led to a decline in the sterling exchange rate.”

The Bank flagged the degree to which the UK’s prospects would be dictated by what happens with Brexit. It declared: “The economic outlook will continue to depend significantly on the nature and timing of EU withdrawal.”

Mr Johnson is smiling and waving as he continues his campaign to be the next prime minister but his ebullience does not seem fitting, in terms of the likely economic impact of what he is trying to do.

If we were to be dragged into a no-deal Brexit, surely even some of the most ideologically driven Brexit voters would not be grinning as the economic reality manifested itself.

Graeme Roy, director of the University of Strathclyde’s Fraser of Allander Institute, warned this week that the risks to the Scottish economy remain “exceptionally high” as he declared the best growth for two years, of 0.5% in the first quarter, had likely been driven by stockpiling.

Surveys have indicated companies across the UK stockpiled finished goods and inputs ahead of the previously planned March 29 Brexit date. Economists have flagged the possibility of stagnation of, or a decline in, UK output in the second quarter as this unwinds.

There is absolutely no sign of a catalyst for better economic times in the UK as a whole amid this Brexit farce. Scotland is, sadly, no less exposed to this grim reality by virtue of having opposed Brexit firmly.

All the while, just what Mr Johnson and his fellow Brexiters hope to achieve by leaving the EU remains as truly baffling as ever.