In the course of trading on February 22, the British pound fell to $1,41020, losing 2.1 percent. As informs bi-Bi-si, it is the largest one-day decline of the British currency since 2009.
The fall of the pound has followed the statements of the mayor of London Boris Johnson, who spoke in support of the UK out of the EU.
“The weakening of [pound] reflects the improved probability of exit of Britain from the EU on the background of the political reaction to the new deal about keeping Britain in the EU. A schism [among the politicians] had been deeper than he had hoped Prime Minister,” said bi-Bi-si Sam hill, senior economist at RBC Capital Markets.
Against the Euro, the British currency declined by 1.02% to €1,27990 per pound. “I don’t think investors believe that exiting the EU is good or bad, but it’s the uncertainty,” said Simon Smith, chief economist at FxPro.
Over the last 18 months the pound has lost 17% against the dollar, partly because of the question about the future of interest rates in the UK, otmeal bi-Bi-si. While the U.S. Federal reserve raised rates last year, the Bank of England ruled out such action in the near future. As a result, the pound sterling becomes less attractive to investors.
The referendum on withdrawal of Britain from the European Union will take place on 23 June. Last week London has concluded with the EU deal, which implies a special status within the Union. The UK achieved agreement on one of their basic requirements. The restriction of four years of labour migrants access to the social system of the EU will be valid for seven years. To activate this paragraph of the agreement, the UK authorities must confirm that the social system of the country is experiencing considerable pressure. London has won the right to interpret the political decisions of the EU and has achieved independence for their financial institutions
London mayor Boris Johnson stated that it has decided to campaign for a British exit from the EU. In his opinion, the EU undermines British sovereignty, but the deal, which was agreed to Prime Minister David Cameron, will not help to make the necessary change in the country. Johnson said that the EU is a “political project” that “takes a risk to come out from under proper democratic control.”
In this case, as reported by Bloomberg, British business leaders and heads of major manufacturing companies, most likely, will vote to maintain the UK within the European Union.
According to the British Institute of Directors (IoD), invoked by the Agency, the agreement reached by Cameron in the negotiations with the EU, is sufficient, and more than 600 members of the Institute are to vote to remain in the EU.