Europe gets tough with Brexit Britain

Europe's leaders have vowed no compromise on the terms of their divorce with Britain as a free-falling pound yesterday dramatically underlined the dangers ahead for Prime Minister Theresa May's government.

French President Francois Hollande sent one of the strongest warnings yet that Britain will have to pay a heavy price for leaving the European Union, while European Commission chief Jean-Claude Juncker said the bloc must be "unyielding" in the face of London's demands.

Hollande called for "firmness" by the EU powers in Brexit negotiations to prevent other countries from following Britain's lead and leave the bloc.

"There must be a threat, there must be a risk, there must be a price, otherwise we will be in negotiations that will not end well," he said in a speech Thursday evening.

His message was yesterday hammered home by Juncker, who said the 27 nations Britain was leaving behind must not give way easily in what are set to be tense negotiations.

"You can't have one foot in and one foot out," Juncker told a conference in Paris, warning that Britain risked "trampling everything that has been built" over six decades of European integration.

"We must be unyielding on this point. I see the manoeuvring (by Britain)," he added.

Hollande's comments added to pressure on the pound on financial markets, with the currency suffering its biggest drop since Britain voted in a June referendum to leave the EU.

However experts said the pound's "flash crash" was probably mainly caused by a computer-generated sell-off that followed Hollande's comments.