Mubasher: The European Union (EU) urged the UK to stop playing “stupid blame game” over Brexit, according to Reuters.

“At stake is the future of Europe and the UK as well as the security and interests of our people,” a tweet by European Council President Tusk was quoted by the news agency.

This came after a UK government source told the news agency that a transition agreement was essentially impossible because German Chancellor Angela Merkel made unacceptable demands, a sign that Downing Street’s proposals to break a stalemate failed.

Merkel and Johnson reportedly spoke on Tuesday morning and the former made it clear that a deal was “overwhelmingly unlikely,” according to a No 10 source.

“If this represents a new established position then it means a deal is essentially impossible not just now but ever,” the source was quoted by Reuters.

Merkel reportedly said that in order to clinch a deal, Northern Ireland would have to remain in the EU’s customs union and full alignment with the bloc forever, the Downing Street source told Reuters.

Tusk’s remarks and the reported failure of Johnson’s proposals suggested that both London and Brussels are preparing for a potentially chaotic Brexit.

Unless Brussels make a compromise and reach a Brexit deal shortly, the UK will then leave without an agreement, a separate government source told the news agency.

In response, the sterling pound dived by 0.5% to one-week low of $1.2226, plunging by more than 0.7% to GBP 0.8993, the weakest level since 9 September.

By 12:04 pm GMT, the GBP/USD pair fell nearly by 0.6% to $1.2220, while the EUR/GBP pair climbed by more than 0.7% to GBP 0.8989.