Pound slumps after Michel Barnier warns of 'very disturbing' Brexit talks deadlock
Brexit negotiations between the UK and the EU have reached a "very disturbing" deadlock, Michel Barnier has declared.
The EU's chief negotiator said talks had ground to a halt over the size of the so-called "divorce bill" Britain is expected to pay when it leaves.
His alarming comments prompted an immediate slump in the value of the Pound.
Mr Barnier confirmed that insufficient progress has still not been made to allow the discussions to move on to future trade deals.
However, he did insist that "decisive progress" could be made by Christmas if there is enough "political will".
He spoke out as he stood alongside Brexit Secretary David Davis at a press conference marking the end of the fifth round of negotiations in Brussels.
Mr Barnier said some progress had been made on the issues of citizens' rights and the Irish border.
But he said there had been "no negotiations" on the financial settlement because both sides are still so far apart on the size of the bill.
He said: "On this question we've reached a state of deadlock, which is very disturbing for thousands of promoters in Europe and it's disturbing also for taxpayers.
"I am not able in the current circumstances to propose to the European Council that we should start discussion on the future relationship.
"That future relationship has to be robust, ambitious and lasting and that requires confidence, between us, and that confidence will flow from clarity and the honouring of all the commitments we've entered into together as the 28."
The EU bigwig also insisted there was "no question" of Brussels making any concessions on the divorce bill, citizens' rights or Ireland.
"We shall succeed only with shared solutions - that is our responsibility," he said.
He added: "There is a new momentum and I remain convinced that with political will, decisive progress is within our grasp in the next two months."
The money markets responded to his stark comments with a fall in the value of Sterling.
Mr Davis said the talks were making "real and tangible progress", but called on the other EU member states to allow Mr Barnier to move onto trade negotiations before the other issues have been dealt with.
He said: "As we look to the October European Council next week, I hope the member states will recognise the progress we have made, and take a step forward in the spirit of the Prime Minister’s Florence speech.
"Doing so will allow us to best achieve our joint objectives by turning the ideas we have explored into concrete shared proposals. That’s the way that we’ll move towards a deal that works for both the United Kingdom and the European Union."