Odds of Brexit rise as London Mayor joins “out” camp

The British pound lost 1.8 per cent versus the US dollar on Monday as markets are increasingly concerned about Brexit – the risk of the United Kingdom leaving the European Union, after four decades of membership.

The pound was pressured to a seven-year low, reaching close to the key $1.3500 level as the odds of Brexit rose on news over the weekend that high profile London Major Boris Johnson announced his decision to back the “Out” campaign and to back Brexit. Meanwhile, at least half of Prime Minister David Cameron’s 331 MPs expected to back Brexit amid a rising tide of opposition within his own Conservative party.

The rising odds of the United Kingdom leaving the European Union continue to weigh on the pound. Today the pound was 0.2 per cent weaker at $1.4119. It is down 3 per cent since the start of January, the biggest drop of any major currency during 2016.

It is believed by many analysts that if Britain would exit the EU, this would have negative consequences for the UK, at least in the immediate term.

Rating agencies Moody’s and Fitch warned that a Brexit could have implications for the UK’s credit ratings.
The referendum has been scheduled for June 23.

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