Boris Johnson said Britain should get ready for an Australia-style agreement based on WTO rules from January “unless there is a fundamental change of approach” from Brussels. ©BBC/AFP/File JEFF OVERS

London (AFP) – The British pound sank  Friday, boosting London stocks, after UK Prime Minister Boris Johnson warned he was ready to walk away from European Union trade talks and prepare for a “no-deal” Brexit.

Sterling slid underneath $1.29 after Johnson accused the EU of failing to negotiate seriously — and declared Britain should “get ready” for an Australia-style agreement based on World Trade Organization rules from January “unless there is a fundamental change of approach” from Brussels.

A Johnson aide ramped up the rhetoric by adding that trade talks are over unless Brussels “fundamentally shifts its position.”

Their comments came after an EU summit this week demanded Britain urgently give ground on fair trade rules to unblock post-Brexit negotiations.

“Sterling fell sharply on comments from PM Boris Johnson calling for the UK to prepare for a no-deal exit in January and accusing the EU of not negotiating seriously,” said Markets.com analyst Neil Wilson.

Analyst Craig Erlam at Oanda commented that “I think the market is broadly taking it for what it is, one final push at concessions from the EU.”

But he added: “It would be terrible for all of this to end without a deal after four years of work and in the midst of a pandemic when businesses are already pushed to the brink.”

Johnson’s comments helped propel the London stock market 1.3 ahead mid session while on Wall Street the Dow had added 0.5 percent minutes after opening.

A weak pound lifts the share prices of companies listed on the FTSE 100 index that make large earnings in dollars.

“A weak pound has been good for the multinationals on the FTSE 100, while some better earnings have lent support to European stocks” overall, said Rabobank analyst Jane Foley.

“However, fresh Covid-19 restrictions continue to cloud the outlook,” she told AFP.

In the eurozone, Frankfurt’s main stocks index was 1.2 percent ahead two hours from the week close — with industrial giant Thyssenkrupp jumping 13 percent after British rival Liberty made an informal bid for its steel activities — but without disclosing a price.

Paris gained 1.7 percent despite a looming Covid-19 curfew in the French capital.

Oil prices recoiled on stubborn energy demand fears ahead of a meeting of key crude producers next week.

Traders were keeping tabs also on developments in Washington as lawmakers struggle to find agreement on a new stimulus for the beleaguered US economy, with a disappointing jobs report highlighting the need for action.

Additionally, while September US retail sales came in above expectations industrial production contracted 0.6 percent, below forecasts of 0.5 percent growth

With polling showing him well behind in the White House race, President Donald Trump said he was open to a bigger stimulus than the $1.8 trillion offered last week, as he seeks to close the gap with Joe Biden.

– Key figures around 1345 GMT –

Pound/dollar: DOWN at $1.2881 from $1.2909

Euro/pound: UP at 90.92 pence from 90.69 pence

Euro/dollar: UP at $1.1729 from $1.1708

Dollar/yen: DOWN at 105.34 yen from 105.45 yen

New York – Dow Jones: UP 0.5 percent at 28,643.21 points

London – FTSE 100: UP 1.3 percent at 5,910.01 points

Frankfurt – DAX 30: UP 1.2 percent at 12,852.97

Paris – CAC 40: UP 1.7 percent at 4,918.40

EURO STOXX 50: UP 1.3 percent at 3,234.67

Tokyo – Nikkei 225: DOWN 0.4 percent at 23,410.36 (close)

Hong Kong – Hang Seng: UP 0.9 percent at 24,386.79 (close)

Shanghai – Composite: UP 0.1 percent at 3,336.36 (close)

West Texas Intermediate: DOWN 1.1 percent at $40.51 per barrel

Brent North Sea crude: DOWN 1.2 percent at $42.64

Disclaimer: Validity of the above story is for 7 Days from original date of publishing. Source: AFP.