GBP/USD extends falls as May reportedly rejects a Customs Union, talks with Labour may break up

UK PM Theresa May is reportedly rejecting a customs union. That is a key demand by the opposition Labour party in the long cross-party talks. If the news is confirmed, the talks could end shortly and the chances of no deal are rising.

According to Laura Kuessenberg of the BBC, sources at the PM's residence at 10 Downing Street says that "we will not sign up to a permanent customs union" and are only ready to consider such an arrangement as an interim one. 

Both parties are holding internal discussions today to assess the way forward.

GBP/USD dropped below 1.2940 on the news and EUR/GBP is rising toward 0.8700.