‘Boris Bounce’ stalls as PM vows Brexit transition will NOT be extended beyond the end of next year despite fears a full trade deal will not be ready

• Pound lost ground against US dollar and euro after PM vow on Brexit transition
• Boris Johnson insists the transition period will not be extended past end of 2020
• FTSE 100 has levelled out after big gains in the wake of the Tory election victory 

The post-election ‘Boris Bounce’ stalled today after the PM vowed the Brexit transition period will not be extended – even if a full trade deal is not ready.

The pound dipped after it emerged that the premier is rewriting his EU Withdrawal Bill to rule out any further delay.

The value of sterling was down a cent against the dollar this morning to 1.32, and it also lost ground against the euro. 

After days of surging following the Tory landslide, the FTSE 100 was also becalmed.

The pause came after Mr Johnson sent an emphatic signal to Brussels that he will not countenance any further delays to Brexit.

Sterling lost ground against the US dollar today as markets digested Boris Johnson’s strong message that the Brexit transition will not be extended

After days of surging following the Tory landslide, the FTSE 100 was also becalmed today

Downing Street said the withdrawal legislation is being amended to rule out any extension of the transition period beyond December 2020.

Officials also moved to scotch speculation that Mr Johnson could embrace a softer Brexit in the wake of his election landslide.

His official spokesman said he would insist on a ‘Canada-style free trade agreement with no political alignment’ – abandoning the closer ties planned by Theresa May.

And parliament will lose its veto over the negotiating mandate Mr Johnson will take into next year’s trade talks.

It comes after the Prime Minister posed with 109 newly-elected Conservative MPs in Parliament as the surging Tories flexed their muscles and the Prime Minister started to shape his new administration.   

It means that the transition period – during which free movement and EU laws continue to operate – will definitely end in December 2020.

The agreement struck with the EU left wriggle room on the end date of the implementation phase, and that was reflected in the previous text of the legislation. In part that was because Mr Johnson needed the broadest possible support among MPs to have a hope of getting the Bill through.

However, the Tory majority of 80 in the wake of the election means there is no danger that the government will struggle to get its tougher version through.  

The move is designed to show Brussels that the PM will not soften his stance when trade talks begin next year.

Michel Barnier, the EU’s chief negotiator, has warned that securing a complete deal by next December is unrealistic. EU sources yesterday said only a ‘bare bones’ agreement could be nailed down by then – leaving some sectors facing ‘partial No Deal’ terms 

The PM met with the cohort of fresh-faced MPs in Westminster Hall in a show of strength to their opponents after last week’s election landslide

More than £80billion was added to the value of Britain’s biggest companies in a ‘Boris bounce’ in the wake of the general election.

As investors continued to cheer the Tory’s crushing victory, the FTSE 100 index rose 2.25 per cent yesterday on its best day for a year.

This takes the total rally to 3.4 per cent in two days of trading since Mr Johnson sealed the biggest Tory majority since 1987.

However, the rally stalled today as markets considered the prospect that a comprehensive trade deal might not be a foregone conclusion. 

Bank of England Governor Mark Carney said the chances of a No Deal Brexit had fallen after the Conservative election victory, with Boris Johnson now able to pass his withdrawal bill in the House of Commons.

Speaking after financial markets closed, Mr Carney said: ‘The worst-case scenario is effectively a No Deal, disorderly Brexit. 

‘The probability of that scenario has gone down because of the election result and the intention of the new government.

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