Goldman Sachs believes that sterling is "not yet cheap" and that it is currently still "around 10% overvalued."

Since the British public voted to leave the EU the value of the pound has dropped by some 15%.

Pound values have rallied since it was revealed yesterday that the UK's exit deal will be subject to a parliamentary vote.

Goldman Sachs calculations are based on an assumption that the UK will need to take action to reduce its unusually-high current account deficit.

British PM Theresa May will attend her first EU leaders summit on Thursday, but she has said that none of the UK's final stances on contentious exit issues will be revealed before formal exit talks begin.

Cabinet ministers in the UK have been issued with a detailed warning stating that leaving the EU customs union could lead to a 4.5% drop in Britain's GDP by 2030.

The Guardian reports that these figures were circulated during a special Brexit cabinet committee which concluded that British ministers are not ready to decide if the UK should seek continued access to the EU's free trade bloc.

International trade secretary, Liam Fox favours a clean break with the EU - but Ms May is reported to have told her colleagues that she is not ready to take a final stance on the issue. Trade concessions are likely to come in exchange for compromises from the UK on border controls.

The study also warned of Britain's ports becoming clogged if new custom controls are introduced.