Pencilled Brexit cabinet meeting cancelled – Sterling falls one percent

Sterling fell almost one percent on Monday against the dollar, as the greenback strengthened broadly and doubts grew over UK Prime Minister Theresa May’s ability to get the backing of the EU and her own party for any Brexit deal.

Theresa May has been forced to abandon plans for an emergency cabinet meeting to approve a Brexit deal, after fresh opposition at home and abroad plunged her timetable into turmoil.

The Independent reports that the prime minister shelved the meeting, pencilled in for Monday, slamming on the brakes after fierce resistance in her cabinet and in Brussels threatened to derail the path to an agreement.

A government source conceded that an outline deal might not be ready by Tuesday – making it increasingly unlikely that a special EU summit to sign it off can be held in November, as hoped.

There are also reports that more ministers were set to quit, following the resignation last week of transport minister Jo Johnson.

The FT reports that Theresa May is racing to revive her Brexit blueprint in time for a crucial cabinet meeting on Tuesday as Brussels negotiators seek to play hardball over Britain’s terms for leaving the EU.

Boris Johnson used his Telegraph column to urge the cabinet to “mutiny” against the prime minister. He wrote that Mrs May was “on the verge of total surrender” to Brussels and that even the unilateral power to withdraw from the backstop would “make little difference” given Mrs May wanted to keep the UK tied to EU regulations anyway.

Negotiators are still trying to thrash out a legal fix to carry Brussels and London towards a Brexit agreement. The blockage is over how to resolve the issue of the Irish backstop, an EU-UK guarantee to prevent a return to a hard border in Northern Ireland. The backstop would allow the entire UK to remain in the customs union after a transition deal ends in December 2020 — at least until a new trade agreement is agreed.