Europe's rhetoric continues to sharpen as both France's President Hollande and Commission President Juncker talk of the need for the EU to 'stand firm' against the prospect of a 'hard' Brexit. Ciara Lee reports.
You can't have one foot in and one foot out. EU Commission President Jean Claude Junker sends a warning to the UK over Brexit negotiations. (SOUNDBITE) (French) PRESIDENT OF THE EUROPEAN UNION COMMISSION, JEAN-CLAUDE JUNCKER, SAYING: "It should be obvious that if the United Kingdom wants to have free access to the (EU's) internal market all the rules and all the liberties around the internal market need to be fully respected." The toughening in rhetoric follows that of Germany and France, with both Merkel and Hollande sending their strongest messages yet. (SOUNDBITE) (French) FRENCH PRESIDENT, FRANCOIS HOLLANDE, SAYING: "Britain wants to leave, but doesn't want to pay. That's not possible." The Brexit backlash comes after some UK leaders suggested it would be able to negotiate a close trade relationship with the EU without having to allow free movement of people into Britain. But that optimism wasn't to be reflected in the latest UK data. Industrial output fell unexpectedly in August. And Britain's trade deficit widened more than expected, jumping to over 12 billion pounds in August from 9.5 billion pounds in July. (SOUNDBITE) (English) CIBC, HEAD OF FX STRATEGY, JEREMY STRETCH, SAYING: "I think there are still plenty of economic headwinds ahead. Yes, Q3 GDP maybe a little bit better than we would have assumed certainly two months ago. But I think we are still set for significant stagnation in the economic activity, certainly into 2017. And that's perhaps one of the reasons why we are seeing some concerns in terms of the government's fiscal backdrop." But the biggest reality check of the week for Britain came from the currency markets, where sterling fell to a 31-year low against the dollar. Investors remain jittery after Prime Minister Theresa May announced she will trigger the formal EU divorce process by the end of March. And the possibility of Britain opting for a "hard Brexit", in order to control immigration, increasing.