Euro-sterling parity is a distinct possibility if Britain crashes out of the EU without a deal, according to a treasury specialist who advises firms on how to deal with currency and market volatility.

The pound did not make any appreciable moves on the election of Boris Johnson as Conservative Party leader in the UK yesterday.

The pound has been verging on 90 pence to the euro for the past month and has been weakening steadily since Theresa May announced her intention to resign two months ago.

"The markets will focus on the appointment of his cabinet. Any signal of a hard Brexiteer in the office of the Minister for Brexit would send a signal to the markets that the probability of a harder Brexit increases," John Finn, Managing Director of Treasury Solutions, said.

"You'd probably see sterling come back over 90 pence relatively quickly. The range has been 85.5 to 90.5 pence over the last 12 months. 90.5 pence appears to be the top level and it hasn't pushed through but if we see an increased probability of a hard Brexit, that would be smashed fairly quickly."

John Finn said parity with the euro was a distinct possibility, especially when taken in a wider global context.

"Brexit is bad for all of us. The international backdrop is of slowing global economies and interest rates are being cut all over the world. The German GDP numbers for the second quarter are going to be poor, possibly negative. Britain crashing out and reverting to WTO trade rules would be very significant."

Many exporters had relaxed since sterling came back to 86 pence against the euro and they were caught by the move back up to 90 pence, Mr Finn said, having put in much hard work to prepare for currency volatility prior to that.

He said firms had to be vigilant in the coming months.

"We're looking at a potential wide range over the next three months. If a deal is done, sterling may come back to 85 pence very quickly. One of the international banks is calling 80 pence by year end, with a deal. If they crash out, we'll be back at 95 pence before October 31st," he said.

One small saving grace for companies trading with the UK is that the euro itself has shown signs of weakness in recent times.

That came about largely thanks to Mario Draghi's signal that the European Central Bank is ready to cut interest rates and introduce more monetary easing.

It is expected that the ECB will opt to cut the deposit rate for banks depositing money overnight.

At the moment, it is at -0.4% with a possible cut of -0.5% in prospect.