The pound fell sharply Tuesday as concerns about a no-deal Brexit and fears over a looming lockdown hurt sentiment.

GBP/USD fell 0.95% to $1.2940.

The possibility of the UK leaving the EU without a trade deal is a “credible hypothesis,” French foreign minister Jean-Yves Le Drian reportedly said Tuesday, according to media reports.

The stark warning that a hard Brexit could be in the offing when the transition period ends on Dec. 31 comes as the French government appears reluctant to give in to UK demands over control of its fisheries.

The uncertainty over deal comes just days ahead of the Oct. 15-16 European summit, during which EU Brexit negotiator will provide an update on Brexit negotiations.

The pound was also hurt by fears the UK is headed for another lockdown following a spike in coronavirus cases.

The Financial Times cited two leading government advisers touting the idea of a two-week lockdown during the school break from Oct. 24 to Nov. 7, to prevent thousands of deaths.