BORIS Johnson’s honeymoon came to an abrupt end yesterday as his Brexit strategy led to a sinking pound and the Republic of Ireland told him the EU was united against his plan for a new deal.

The Prime Minister fuelled fears of a no-deal Brexit by saying avoiding one in October was now “very much up to” the other European nations.

After the PM was booed on a visit to Cardiff, Welsh First Minister Mark Drakeford emerged from a meeting with him, saying Mr Johnson had no details, just “vacuous optimism”. 

The value of the pound continued to slide on currency markets as the UK Government ramped up preparations for a no-deal exit on October 31.

Sterling hit a fresh two-year low against the dollar at $1.2117 and ended down almost a cent at $1.2148. Against the euro it fell to €1.0881 at one point.

The pound has now dropped by around 2.4 per cent against the dollar since Monday, and is being exchanged for less than one euro at UK airports.

One currency expert predicted a “horrendous summer” for holidaymakers as they found their money bought them less overseas.

A weaker pound should help UK exporters, although it also makes imported goods more expensive, pushing up prices.

The jitters in the markets coincided with Mr Johnson clashing with Leo Varadkar over the Irish backstop in his first phone call to the Taoiseach, a full six days since becoming PM.
Mr Johnson is demanding abolition of the backstop, which is intended to maintain frictionless trade with Northern Ireland and avoid a hard border if future trade talks fail. 

A central part of the withdrawal agreement he now says is “dead”, Mr Johnson has effectively made the backstop’s removal a precondition of fresh talks with EU leaders. 

However, Mr Varadkar told him the EU27 were united against scrapping the backstop and reopening the Withdrawal Agreement, which could bring a no-deal Brexit much closer.

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A spokesman for the Irish government said: “On Brexit, the Taoiseach emphasised to the Prime Minister that the backstop was necessary as a consequence of decisions taken in the UK and by the UK Government.”
Mr Varadkar also said the high-tech “alternative arrangements”

Mr Johnson says can replace the backstop had “yet to be identified and demonstrated”.

The Taoiseach invited the PM to Dublin to “further their respective analyses on Brexit”.

Sinn Fein said the implications of no-deal for Northern Ireland were enormous and that if a hard border returned, Mr Johnson should order a poll on Irish reunification. 

Despite the clear disagreement, Mr Johnson later said he had a “very good conversation” with his Irish counterpart, insisting “technological solutions” already existed for frictionless trade at the border.

He said: “The UK, under no circumstances, will have checks at the border in Northern Ireland. We will throw all our energies into sorting out the problems of frictionless trade at the border. We can do it. 

“We have all the sorts of technological solutions that are necessary to do it. But let’s solve those issues in the context of the free trade agreement that we’re going to do after we come out on October 31.”

On a visit to Wales, where he was warned no-deal could destroy Welsh lamb exports to the EU because of 40 per cent tariffs, Mr Johnson said he wanted a new Brexit deal, but it would depend on the response of the EU 27.

He said: “We’re not aiming for a no-deal Brexit, we don’t think that’s where we’ll end up. This is very much up to our friends and partners across the channel.

He added: “If they understand that then I think we’re going to be at the races. If they can’t compromise, if they really can’t do it, then clearly we have to get ready for a no-deal exit, and I think we’ll do it.”

Lord Jim O’Neill, who worked for chancellors George Osborne and Philip Hammond, said there was “not yet” a sterling crisis, but a combination of factors was “essentially pointing one way for the pound”, and traders would now seek to exploit it.

The former chairman of Goldman Sachs Asset Management said the government’s pronouncements were “close to a free lunch” for them.

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He said: “I’m pretty sure that a lot of big foreign exchange and hedge fund type people have had a pretty tricky life the past few years for a whole host of reasons and they’re probably looking at what’s being said coming out of the UK as almost close to a free lunch. 

“A lot of them will be saying ’Thank goodness for Boris, he’s giving us a chance to make some money’.”

However, he added the pound looked “very cheap”, and if there was a Brexit deal and the Bank of England got tougher on monetary policy, sterling could recover “very sharply”.

James Hickman, commercial manager at the travel cash company FairFX, said: “Unfortunately holiday makers are going to experience a pretty horrendous summer.

“If they are visiting Europe they could be getting less than parity for their pounds when buying euros, and they will be getting a poor dollar rate if going to the USA.”

“It’s going to get worse. The market is digesting the news it is almost inevitably going to be a hard Brexit. For anyone going abroad in August, it is going to be a very expensive time.”

SNP Westminster leader Ian Blackford challenged Ruth Davidson to give a “cast-iron guarantee” her MPs would vote against a no-deal Brexit in line with her personal rejection of it.

He said the Scottish Tory leader had to prove her opposition to no-deal was more than a “cynical PR exercise” when the Commons resumed in September.
Two Scottish Tory MPs -  Scottish Secretary Alister Jack and his junior Colin Clark - are now  ministers, and so bound to vote in line with the government’s position.

Ms Davidson, a passionate Remainer in the 2016 referendum, said on Sunday that she would not support a no-deal Brexit, aggravating a long-standing feud with Mr Johnson.

In a letter to Ms Davidson, Mr Blackford said: “You’ll be aware that some have suggested your opposition to a no-deal Brexit is little more than meaningless empty rhetoric. 

“A cynical PR exercise designed to distance you from Boris Johnson, in the knowledge that the Tory party is tanking in the polls in Scotland and came fourth place in the European elections on just 11%.

“Given the large number of flip-flops and u-turns you have performed on Brexit in recent years, people are understandably sceptical that your opposition to a No-Deal Brexit will also amount to nothing more than hollow words, and that in the end you’ll accept whatever form of Brexit is imposed on Scotland by Westminster. 

“I am therefore asking you to give a cast-iron guarantee that you will instruct all Scottish Tory MPs to vote against and block a no-deal Brexit at every opportunity that arises in the coming months, when the House of Commons returns from recess.” 

A Scottish Tory spokesman said: “We’re not going to jump ahead 15 stages or deal with hypotheticals – everyone’s focus is getting a deal done with the EU that can get through parliament.” 

Earlier, Tory MSP Adam Tomkins admitted Mr Davidson could not prevent a no-deal Brexit, but argued the UK Government “are not pursuing” leaving the EU without a deal.

The Scottish Conservatives’ Brexit spokesman said Ms Davidson had received assurances the UK would “not surrender” in its attempts to renegotiate a deal.
But asked on BBC Radio Scotland four times how Ms Davidson could stop a no-deal, he said: “I don’t think any individual is going to stop it. I think what will stop it is a majority in the House of Commons.”

After meeting Mr Johnson at Bute House on Monday, Nicola Sturgeon said she believed his  “dangerous” government privately wanted a no-deal Brexit.
Mr Tomkins insisted the UK Government was not actively pursuing that outcome, adding: “Everybody is preparing for an eventuality which they do not want to have to face.

“I remain confident that the Prime Minister and his team are going to be successful in getting the Europeans to understand that we are serious about this, that the Withdrawal Agreement that was negotiated by the previous administration cannot survive in its present form and needs to be reopened, needs to be renegotiated.”

Dominic Raab will use his first overseas trip as Foreign Secretary to meet leaders from a south-east Asian trading bloc of 650m people in a sign of the UK’s shift in focus.

Mr Raab, effectively the deputy PM, said the UK had been focused on EU trade too long and must “expand our horizons and raise our game”.

On a visit to Bangkok he will join foreign ministers from the 10 Asean (Association of Southeast Asian Nations) countries at their annual meeting today and tomorrow.

The Asean bloc - made up of Brunei, Burma, Cambodia, Indonesia, Laos, Malaysia, the Philippines, Singapore, Thailand and Vietnam - has bilateral trade links with the UK worth £36bn a year, a figure dwarfed by UK trade with the EU.

Mr Raab will also have a bilateral meeting with Thailand’s foreign minister Don Pramudwinai.

Asean represents a market of 650m people and the UK hopes the trading relationship will grow.
Economic growth for Asean countries is forecast to be significantly above the global average over the next five years, the Foreign Office said, and the bloc is on course to become the world’s fourth largest economy by 2030.