CURRENCY experts believe there is worse to come for sterling, which has been hammered by increased fears of a no-deal Brexit resulting from Boris Johnson’s ascension to Prime Minister and hit fresh 23-month lows against the euro yesterday.

The euro climbed as high as 92.65p during trading, as sterling found itself on the ropes again. The pound also once again fell below $1.21 during yesterday’s session.

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A poll of foreign exchange strategists by Reuters, which was published yesterday, shows they expect sterling will fall further and trade between $1.17 and $1.20 ahead of the October 31 Brexit deadline that Mr Johnson has said will apply “no matter what”.

The pound is well adrift of the near-$1.50 levels at which it traded on June 23, 2016, ahead of the European Union referendum result.

Jane Foley, head of foreign exchange strategy at Netherlands-based Rabobank, said: “Fears of a no-deal Brexit are likely to worsen, though we anticipate it will be avoided. Our official house view is that there will be a delay, but kicking the can down the road doesn’t ease uncertainty.”

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A new poll of economists by Reuters, conducted between August 2 and 7, puts the median probability of a no-deal Brexit at 35 per cent. This is the highest probability attached to such an outcome since Reuters first asked this question two years ago. It is more than double the 15% probability attached by economists in May to a no-deal Brexit outcome, and up from 25% in June and 30% in July.

In the latest poll, the probabilities attached to a no-deal Brexit by economists ranged from 15% to 75%.

Sterling was, at 5pm in London, trading around $1.2138, off its worst levels but down 0.19 cents on its previous close and within one cent of 30-month lows hit last week. The pound had by the end of the session crawled off its intra-day lows against the euro. The single currency was at 5pm in London trading around 92.35p, little changed from its Wednesday close of 92.4p.

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Economists polled by Reuters continue to believe a free-trade deal between the UK and EU is the most likely eventual outcome on Brexit. However, a no-deal departure and move to World Trade Organisation rules is viewed as the second most likely outcome.

The third most likely outcome is, in the view of economists, the UK remaining a member of the European Economic Area and paying into the EU budget to maintain access to the single market. Cancellation of Brexit is seen as the fourth most likely result.

Reuters’ latest poll puts the median probability of UK recession within a year at 35%. The probability of a recession within two years is put at 40%. Each of these probabilities is up by five percentage points on last month.

Mr Johnson, who became Prime Minister on July 24, has repeatedly highlighted his determination that the UK will leave the EU by October 31 – with or without a deal.

Newly installed Foreign Secretary Dominic Raab has declared that the UK is “turbo-charging” its no-deal preparations and claimed the EU is being “stubborn” in terms of its Brexit negotiating stance.

The pound’s weakness has made overseas destinations even more expensive for UK travellers in the peak summer holiday season. Sterling weakness makes UK exporters more competitive in overseas markets.

However, British Chambers of Commerce, in a report published today, warns that “many UK exporters are treading water at a time of deep uncertainty”.

Its latest quarterly international trade outlook survey of around 3,400 UK exporters, in partnership with delivery services group DHL, found 63% of manufacturers consider exchange rates to be a concern to their business.

British Chambers highlighted its belief that this survey finding indicates “the pressure from sterling volatility”.