(Adds quote, background) LONDON, Dec 20 (Reuters) - Sterling dropped 0.82% on Sunday after Britain imposed tough new restrictions to stem a fast-spreading new coronavirus strain and on a lack of progress towards a Brexit deal. London and southeast England may stay under tighter curbs for some time to stem the new coronavirus strain, Britain’s health minister said, while several European countries began closing their doors to travellers from the United Kingdom , In addition, in the Brexit trade talks on Sunday Britain insisted that the European Union should move to open the way to a new, post-Brexit trade pact, which drew a swift response from the bloc’s negotiator defending the union’s right to protect its interests. Sterling dropped 0.82% to $1.3417 against the dollar by 1925 GMT. “It’s difficult to unpick the lack of progress on Brexit from the panic on the new strain of coronovirus - but both are disappointing and it makes sense for sterling to trade lower,” said ING strategist Antoine Bouvet. “I expect (British) gilts to open higher tomorrow on demand for safe assets,” he said, referring to Britain’s government bonds. British gilt yields -- which move inversely to price -- were a touch lower on Sunday, with the short-dated two-year gilt yield dropping a basis point to -0.09%. Gilts will start trading in earnest during market hours on weekdays, when gilt futures are also open for trading. (Reporting by Abhinav Ramnarayan; Editing by Angus MacSwan and Jane Merriman)