Theresa May moves to allay 'hard Brexit' fears

The British prime minister played down this week's pound sterling falls

Theresa May moves to allay 'hard Brexit' fears

Image: Kirsty Wigglesworth / AP/Press Association Images

After a new slump in the pound, Theresa May has moved to allay industry fears of a clean break from European trading arrangements.

She said that she wanted British business to have the maximum possible opportunity to "operate within" the single market.

Since an uncompromising speech on the opening day of her Conservative party's conference, widely interpreted as an endorsement of a "hard Brexit", sterling has been under pressure on the currency markets.

Today the pound fell to a new 31-year low against the US dollar - below the level it slumped to on the day after the vote to leave the EU.

The British prime minister played down the sterling moves in an interview with Sky News.

She said: "Of course we see sterling moving in different ways at different times but if you look overall at economic data coming out over last few months actually the data has been more positive than people were expecting. It's early days of course."

Asked why she was withdrawing Britain from the Single Market created by her party and predecessor Margaret Thatcher, she said: "The question is what the relationship we want in the future with the EU.

"I want that relationship to have the best possible deal, the maximum opportunity, for UK businesses to be able to trade with and to operate within that market in the European Union which is the Single Market".

The phrase "operate within" means that the British government is willing to contemplate some sort of shared regulatory framework with the European Union, short of European Court of Justice jurisdiction.

This is especially important for the financial services sector, whose representatives at this conference have been expressing deep concern at some ministers reluctance to take seriously their need to maintain the "passport" to operate in European markets.

A number of Mrs May's cabinet ministers at the conference have privately pointed out that her speech could be consistent with membership of the EFTA (European Free Trade Association) bloc, which has its own Court, situated next to the ECJ in Luxembourg.

"We need to approach this to make sure we get the right deal for the UK, not looking at models that already exist but saying 'what's going to work for us?'.

"This is about a partnership, a relationship with the European Union which is going to be in the best interests of the UK," she said.

The PM will make her full speech on the domestic agenda to close the conference on Wednesday.

It will focus on economic, corporate and social reforms "where everyone plays by the same rules".

Earlier today, the Irish Government confirmed it is to hold an all-island forum on Brexit next month.