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The British pound held above a 10-day low as investors cut their holdings with British and European negotiators scrambling to salvage post-Brexit trade talks.

British Prime Minister Boris Johnson said on Friday there was no point in continuing talks and it was time to prepare for a ‘no-deal’ exit when transitional arrangements end on Dec. 31 while the European Union said Britain needed to give ground.

EU chief negotiator Michel Barnier had been due in London for talks with his British counterpart David Frost this week. Instead, they will now speak by telephone to discuss the structure of future talks.

With only 11 weeks to go before the end of the transition period, Berenberg economists estimate the probability of a hard Brexit at as much as 50% with both sides taking steps to soften the blow on their respective economies.

Latest positioning data for the week ending Oct. 13 showed investors have been steadily reducing their holdings in the British pound.

While the overall picture showed a small reduction in net short pound positions, the overall picture was worrying with hedge funds cutting both their bought and sold bets.

About six million people in the United Kingdom face tougher COVID-19 lockdowns in coming days as Wales and Manchester, the country’s third largest city, mull additional restrictions as the novel coronavirus outbreak accelerates.

The United Kingdom recorded 16,982 new daily cases of COVID-19 in the space of 24 hours, according to government data issued on Sunday, up from 16,717 the previous day.

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