Pound slides as UK political tur­moil flares ‘Brexit’ con­cerns

The Pak Banker - - 6BUSINESS -

The pound fell from a onemonth high ver­sus the dol­lar af­ter a se­nior mem­ber of the U.K. govern­ment re­signed on Fri­day, deep­en­ing the rift in the rul­ing Con­ser­va­tive party just three months be­fore the ref­er­en­dum on Bri­tain's Euro­pean Union mem­ber­ship.

Ster­ling weak­ened against all but one of its 16 ma­jor peers and was the worst per­form­ing cur­rency among the Group-of10 na­tions.

Iain Dun­can Smith, a for­mer leader of the Con­ser­va­tives and a prom­i­nent fig­ure sup­port­ing the cam­paign for Bri­tain to leave the EU, a so-called "Brexit," crit­i­cized the govern­ment on its cuts to wel­fare ben­e­fits while taxes for higher earn­ers and com­pa­nies were be­ing de­creased.

The Bri­tish cur­rency was also weighed down by a re­port from the Con­fed­er­a­tion of Bri­tish In­dus­try that said leav­ing the EU would cost the U.K. 100 bil­lion pounds ($144 bil­lion) in lost eco­nomic out­put and 950,000 jobs by 2020.

The pound "trended weaker against the dol­lar and euro due to the political trem­bling over the week­end," an­a­lysts at Royal Bank of Canada in Lon­don, in­clud­ing se­nior U.K. econ­o­mist Sam Hill, wrote in a note to clients.

The CBI study "sug­gest­ing that the U.K. would be sig­nif­i­cantly worse off un­der an EU exit sce­nario" also hurt ster­ling, they wrote.

The pound fell 0.5 per­cent to $1.4404 as of 9:29 a.m. Lon­don time, af­ter climb­ing to $1.4514 on March 18, the high­est since Feb. 16. Ster­ling weak­ened for the first time in three days ver­sus the euro, drop­ping 0.4 per­cent to 78.15 pence.

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