British Prime Minister Boris Johnson on Monday urged EU leaders to drop their opposition to renegotiating Brexit, as the pound slumped on growing concerns about a no-deal departure.

Johnson, who took office last week, wants to change the exit terms struck by his predecessor Theresa May but insists Britain must leave the EU on the October 31 deadline – with or without a divorce deal.

Brussels has said it will not reopen the text.

“The withdrawal agreement is dead,” Johnson told reporters during his first visit to Scotland as premier.

“I am confident we will get a deal but it is also right we prepare for no deal,” the Conservative leader said.

Johnson met Scottish First Minister Nicola Sturgeon, the leader of the separatist and pro-EU Scottish National Party, who accused him of secretly pursuing a no-deal Brexit that she said would be “catastrophic”.

“Behind all of the bluff and bluster, this is a government that is dangerous,” Sturgeon said afterwards.

“This is a government that is pursuing a no-deal strategy, however much they may deny that.”

She said believing that Brussels would change its offer was “a strategy doomed to failure”.

Britain’s pound lost more than one per cent of its value against the dollar on Monday, hitting its lowest level since March 2017.

The Confederation for British Industry, the country’s top business lobby group, said companies now needed to be on an “emergency footing” because of the growing likelihood of no deal.

In a report, the CBI warned that both Britain and the EU were not prepared for a no-deal Brexit and urged businesses to step up contingency plans.

Iran tanker swap ruled out

In London, Britain’s new International Trade Secretary Liz Truss met US Ambassador Woody Johnson to discuss “fast-tracking” reaching a trade deal for when Britain leaves the EU.

“Negotiating and signing exciting new free trade agreements is my top priority – and none are more important than with the US,” she said, talking up the “golden opportunities ahead”.

The Institute for Government warned that a no-deal Brexit would “dominate government for years”, allowing little room for other domestic priorities outlined by Johnson such as health, education and transport.

The think tank said such an outcome would also place the UK, which brings together England, Scotland, Wales and Northern Ireland, “under unprecedented pressure”.

Meanwhile, Britain on Monday ruled out swapping seized oil tankers with Iran as a second UK warship arrived in the Gulf to conduct convoys that have irritated Tehran.

A sense of crisis in the world’s busiest oil shipping lane has been building up for weeks as Iran responds to US President Donald Trump’s “maximum pressure” campaign.

The US economic sanctions and stepped-up military presence are designed to force Iran to renegotiate a landmark 2015 nuclear pact from which Trump pulled out last year.

Britain further outraged Iran by seizing one of its tankers – the Grace 1 – on July 4 on suspicion of it carrying oil to Syria in violation of EU sanctions.

Iran vowed to retaliate and its Revolutionary Guards stormed and detained the UK-flagged Stena Impero and 23 crew as they sailed through the Strait of Hormuz on July 20.

New British Foreign Secretary Dominic Raab flatly rejected the idea of the two tankers being exchanged or simultaneously released in a bid to dial back the tensions.

“There is no quid pro quo,” Raab told BBC radio.

“This is not about some kind of barter. This is about international law and the rules of the international legal system being upheld,” he said.

“That is what we will insist on.”

Iranian President Hassan Rouhani had hinted earlier that he was open to a tanker swap.

Iran said on Sunday that its ship’s seizure was also a violation of the 2015 nuclear pact that Britain co-signed and is trying to keep alive with EU allies.

Its remaining participants met in Vienna over the weekend for talks that also saw Iran lash out at Britain’s proposal for European nations to lead a naval and air Gulf escort mission.

Britain’s HMS Montrose frigate began helping UK-flagged tankers enter into and out of the Gulf last week.

Its naval presence near Iran grew to two with the arrival on Sunday of the HMS Duncan destroyer – the most advanced warship Britain currently has.

The UK defence ministry said the two will conduct escorts together for the next month.

The Montrose will then go in for scheduled maintenance and be replaced by the HMS Kent frigate later this year.