"The UK's vaccination campaign faces a bump in the road owing to the EU's plans to restrict vaccine exports," said Shaun Osborne, Chief FX Strategist at Scotiabank.
Still, he adds that "we think the remaining part of the recovery will be slower" as lagging growth in production catches up to an initially services-fuelled rebound.
The Brexit headlines overshadowed US President Donald Trump's demand for changes to a coronavirus aid bill, effectively threatening a government shutdown next week.
The FTSE 100 touched its lowest since Dec. 2 in early trading, but clawed back some of its losses to trade down 1.2% as the pound's 2% drop limited a fall in the exporter-heavy index.