December 6, 2017 / 11:38 AM / a year ago

Sterling extends drop, stocks rise on reports no Brexit deal this week

British five pound banknotes are seen in this picture illustration taken November 14, 2017. REUTERS/Benoit Tessier/Illustration

LONDON (Reuters) - Sterling extended an earlier decline to hit a one-week low on Wednesday, while British blue-chip stocks erased losses, after the Sun newspaper’s political editor said on Twitter a Brexit deal is unlikely this week.

The British pound which was already down on the day, extended its drop to stand 0.6 percent weaker at $1.3358 on the day. Against the euro, sterling was down half a percent on the day 88.33 pence.

UK shares recouped the session’s losses as sterling fell, with the FTSE turning into positive territory even while its European peers stayed deep in the red.

The Sun’s political editor Tom Newton Dunn, citing a source in the Democratic Unionist Party, said there would be no Brexit deal done this week and hopes are fading fast in London that Prime Minister Theresa May will go back to Brussels on Thursday.

Reporting by the London Markets Team; Editing by Jemima Kelly

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