Sterling was down nearly one percent against the euro to €1.1797 at 3.05pm having started the day at #1.1887.The British currency has tumbled even further against the US dollar, down 1.4 percent to $1.3022 from $1.3182 when financial markets opened. This morning, in his first speech since the UK officially left the EU on Friday evening, Mr Johnson said he wouldn’t accept EU rules as a price to pay in order to secure a free trade deal with the EU.

Despite officially leaving the EU on January 31, the U has yet to agree a new free trade relationship with Brussels.

The Prime Minister wants to have a n agreement in place by the end of the transition period in December 2020.

But senior EU officials, including Mr Barnier and European Commission President Ursula von der Leyen, have warned the demands being set out by Mr Johnson make it impossible for a full trade deal to be in place before then.

Today, both sides have laid out what they want from a trade dealt the positions appear so far apart that economists are not riling out the possibility go an abrupt departure before the end of 2020.

Anna Rosenberg, head of Europe and the U.K. at the advisory firm Signum Global, told CNBC: “I would put it at 20 percent at the moment.

“We have to track how talks pan out. If tensions rise and they seem to break down, I will revise it up.”

Following the departure from the EU on Friday evening, the UK has now entered a transition period, during which time it must continue to follow EU laws and rules, while the UK Government can still prepare trade deals with other nations.

During this time, the UK wants to develop new trade agreements with the EU, but failure to achieve this would hammer British and European exporters with substantially higher costs.

David Henig, a UK trade policy expert at the think tank ECIPE, told CNBC: “There’s no doubt there is also considerable difference between the parties.

“There is a possible deal that removes tariffs in return for some level playing field provisions, but equally no deal remains a distinct possibility.”

This morning, Mr Johnson came out fighting, when he said there is “no need” for a free trade agreement to involve accepting EU rules.

In 2016, the EU reached a free trade agreement with Canada but it took seven years to complete and has yet to be fully ratified by national parliaments in Europe.

The Prime Minister said: “We have made our choice: we want a free trade agreement, similar to Canada’s.

“There is no need for a free trade agreement to involve accepting EU rules on competition policy, subsidies, social protection, the environment or anything similar, any more than the EU should be obliged to accept UK rule.”

This is a breaking story. More to follow.