UK's May outlines plan for 'hard' Brexit

Britain's Prime Minister Theresa May delivers a speech on leaving the European Union at Lancaster House in London, January 17, 2017.   [Photo/Agencies]

Britain's Prime Minister Theresa May outlined plans for a clean break with the European Union that will include the United Kingdom leaving its single market trade arrangements.

Britain will not seek a partial membership of the European Union that leaves it "half in, half out", May said on Tuesday in the clearest expression of the government's intentions in Brexit negotiations with its EU partners since a majority of Britons voted to leave the union on June 23 last year.

In a speech outlining her vision for a "global Britain", she told an audience of diplomats and government colleagues: "We do not seek to hold on to bits of membership as we leave."

Anticipation of a speech expected to signal May's intention to pursue a "hard Brexit" sent the pound plummeting on Monday to a level not generally seen for 30 years.

It recovered before and during the speech on Tuesday in a volatile market.

Sterling's rise was attributed in part to May's shedding of light on her government's strategy after months of uncertainty but also to news of higher-than-expected UK inflation that could spark a rise in interest rates.

May confirmed Britain would leave the single market. To remain, she said, would amount to not leaving the EU.

The Remain camp and elements of UK industry and business had hoped to retain membership of a mechanism that allows unrestricted trade in goods and services within the EU. But it comes at the price of EU-wide free movement for citizens of the 28-member bloc.

Although the one-line referendum question in June did not specify what kind of Brexit was on offer, the vote to leave was interpreted as a widespread rejection of such unrestricted immigration.