Theresa May Brexit speech as it happened: PM warns European values will be crushed into tiny pieces if EU tries to punish Britain

Theresa May is to give further details of her plans for Brexit in a speech saying she does not want to UK “half-in, half-out” of the European Union.

The Prime Minister will say that she wants a “truly global Britain” which will be “more outward-looking than ever before” and will remain “the best friend and neighbour” of the other 27 members of the EU.

But she will insist that she is not “seeking to hold on to bits of membership” or to achieve a “partial” or “associate” membership of the EU.

The pound tumbled below 1.20 US dollars on the eve of the London address, and a further day of market volatility is expected as nervous traders weigh up the possible impact of Mrs May's comments on Britain's future trading relationship with the continent.

Lord Mandelson said he was not impressed by a pledge to set out 12 negotiating by priorities and four 'key principles'.

"It sounds suspiciously to me like a lot of words to disguise the fact that there is still no plan emerging," he said.

The Labour peer told BBC Radio 4's Today programme it was "significant" that the Prime Minister has distanced herself from associate EU membership.

Lord Mandelson said other Tory cabinet members favoured remaining in the single market or customs union to guard against the dangers of "hard Brexit".

"It's when the UK could suddenly face tariffs of 10% or more on our biggest export," he added, raising concerns over possible financial penalties to deal with the EU market.

Lord Mandelson accused the Prime Minister of "choosing to appease cheerleaders" including The Sun and Daily Mail rather than getting the best deal for Britain.

"There are no clicky finger solutions to these issues," Lord Mandelson said, calling Ms May's apparent lack of concern "very worrying".

"I don't think she should reveal what her compromised bottom lines are," he added, but said she needed to set out negotiations that "both sides can live with".

Challenged on whether his response was governed by his support for Remain, Lord Mandelson said he respected the referendum's result but believed the "best deal for Britain" would be a Norway-style model of staying in the single market.

He also said the free movement of people "must be accepted" alongside other economic and financial movement.

Economists are bracing for a "wild ride" for the value of the pound today, as Ms May's speech is expected to affect the markets.

Sterling was trading up against the US dollar ahead of the speech at 1.21 US dollars, but experts put that down to weakness in the US currency rather than underlying positive sentiment among traders. The pound was down slightly against the euro at 1.13 in morning trading.

Neil Wilson, senior market analyst at ETX Capital, said: “We're expecting a wild ride for the pound today. These gains are largely down to dollar weakness, however, as the greenback has suffered a bit of a sell-off overnight and gold has risen amid a bid for safer assets ahead of this speech and Donald Trump's inauguration on Friday.”

  ↵

Here's another update on the pound from our business correspondent, Zlata Rodionova: 

The pound has fallen about 19 per cent against the dollar since the UK voted to leave the EU in June’s referendum, with declines since the initial aftermath of the vote mainly sparked by concerns Ms May plans to quit the EU’s single market in order to regain control of Britain’s borders and laws.

“The harder the Brexit, the weaker the pound,” says Christian Gattiker, chief strategist and head of research at Julius Baer.

He says that although it is hard to predict what Ms May will say, “perception of it will weaken or strengthen the British pound.”