The EU is likely to confirm this week that Brexit talks have not made sufficient progress to move onto discussions about a future trading relationship, though the UK will be hoping it will consider a two-year transition period.

Sterling slid for a second day as the markets weighed up the potential Tory challengers to UK Prime Minister Theresa May’s leadership and warned of more “choppy” times ahead.

Sterling markets believe the UK is heading toward a hard Brexit in two years’ time and are preparing for a volatile period over the next few months.

Sterling fell sharply against the euro, ratcheting up the pressure on Irish firms selling goods and services across the Irish Sea following the weekend declaration by British Prime Minister Teresa May that the UK is intent on a hardline exit from the EU.

Sterling rose for the first time in four days yesterday as hedge funds and other large speculators cut their bets that the currency will fall for a second week before the Bank of England’s latest policy decision.

The pound climbed from a one-week low as a report showed the UK unemployment rate fell below 5% for the first time since 2005.

Online opinion polls in the run-up to May 5 elections across Britain overstated support for the UK Independence Party, suggesting they may also be overestimating backing for leaving the EU, according to a leading polling analyst.

It’s as if a weight is lifting from the shoulders of sterling’s traders.

UK Chancellor of the Exchequer, George Osborne, took aim at the soft drinks industry yesterday, announcing a new tax on sugary drinks.

Sterling fell to its lowest level against the dollar since 2009 but was little changed against the euro at almost 76.5 pence after Bank of England governor Mark Carney yesterday signalled a boost to UK interest rates is still some way off.

Sterling tumbled versus the euro and reversed an advance against the dollar after the Bank of England yesterday signalled there is scope to keep interest rates at a record low as inflation weakness persists.

Quantitative easing may be helping Europe achieve its economic targets, but it’s also undermining the long-term viability of the euro by tarnishing its allure as a global reserve currency.

World stocks drifted today as investors largely shrugged off a weekend vote in which Crimeans opted to leave Ukraine and join Russia.

Japan’s central bank is continuing to pour cash into the banking system to calm jittery money markets as the yen shot to a record high.

The dollar weakened in midafternoon in Tokyo on concerns over the US economy after the Federal Reserve cut interest rates by a surprise 50 basis points overnight, dealers said.