The U.K.'s negotiating position on Brexit was thrown into doubt after it emerged Prime Minister Theresa May had "categorically" ruled out remaining in the European Union's customs union, in an apparent concession to the euroskeptic faction of her government.
U.K. press reported over the weekend that "hard Brexiters" within May's government were so alarmed by the prime minister's apparent preference for remaining in some form of customs union with the EU, that they were plotting a coup to remove her.
The Financial Times quoted a Downing Street source Feb. 4 saying: "To put this to rest, we are categorically leaving the customs union ... we are proposing either of two models — a customs partnership or a highly streamlined customs arrangement. And we are going to get a deal that works for the U.K."
May faces two critical meetings of her cabinet in the coming days as she tries to agree to a clear negotiating position for forthcoming talks with the EU's chief negotiator, Michel Barnier, who arrived in London on Feb. 5 for talks with his U.K. counterpart, David Davis.
Sterling, which has staged a recovery against a weakening dollar in recent weeks, was down more than 0.7% by 2.30 p.m. in London to just above $1.40. The U.K. currency was the weakest major performer amid a broad rebound in the greenback following Feb. 2's strong jobs data.
