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04/12/2016

Pound slumps as latest poll renews ‘Brexit’ fears

UK & Europe

Pound slumps as latest poll renews ‘Brexit’ fears

The Queen's pounds

[Colin Mutchler/Flickr]

The pound slumped Tuesday (15 March) after a newspaper poll showed an edge for voters who want Britain to leave the European Union.

The Telegraph said its new poll found 52% of the people planning to vote in the June referendum support “Brexit”.

“Voters who want Britain to leave the European Union are more motivated than those who say they are in favour of staying in,” said the newspaper.

Sir Lynton Crosby, who does survey analysis for the Telegraph, said the final outcome of the vote “is in the balance”. The choice facing voters is whether the economic risks of remaining in the EU are bigger or smaller than the implications of uncontrolled immigration, he believes.

The pound shed 1.1% against the dollar, trading at $1.4151 around 2100 GMT.

“The fact that the Brexit issue effectively remains a toss-up in UK politics is worry enough for the market to keep cable under pressure for the time being,” said Boris Schlossberg of BK Asset Management.

Polls have until now shown in the “In” and “Out” camps neck and neck, with the “Remain” camp as slight favourites.

But as the 23 June deadline comes closer, warnings from Britain’s partners are growing louder.

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The latest warning came from Malta, a former British colony.

“Acrimony and resentment” would follow if Britain voted to leave the European Union in a June referendum, Maltese Prime Minister Joseph Muscat said in London on Tuesday.

“The UK would need to be treated as a friend, but not as family. Relations would be polite but not intimate. The UK would be respected but not trusted,” Muscat said.

Britain is set to vote on whether to remain in the 28-member bloc on 23 June, and Malta is set to take over the EU presidency shortly afterwards for the first half of 2017.

Speaking at the Chatham House think-tank in London, Muscat said that the process of revising relations with Britain would involve “acrimony and resentment”.

“Negotiating an exit arrangement for the UK would be perceived a time-consuming distraction,” Muscat said.

“EU leaders would be keen to show to their national audiences which might warm to the idea of leaving the union that such a process would be very ugly, painful and costly.”

Because Malta is part of the Commonwealth, a group of states which are mostly ex-British colonies, Maltese citizens resident in Britain are eligible to vote in the referendum.

There are 27,000 Maltese-born residents in the United Kingdom, according to data from 2014.

Background

During his campaign fro re-election in 2015, British Prime Minister David Cameron promised to renegotiate the UK's relations with the European Union and organise a referendum to decide whether or not Britain should remain in the 28-member bloc.

The British PM said he will campaign for Britain to remain in the EU after a two-day summit in Brussels where he obtained concessions from the 27 other EU leaders to give Britain “special status” in the EU.

But EU leaders had their red lines, and ruled out changing fundamental EU principles, such as the free movement of workers, and a ban on discriminating between workers from different EU states.

The decision on whether to stay or go could have far-reaching consequences for trade, investment and Great Britain's position on the international scene.

The campaign will be bitterly contested in a country with a long tradition of euroscepticism and a hostile right-wing press, with opinion polls showing Britons are almost evenly divided.

Timeline

  • 23 June: Referendum.
  • July-December 2017: United Kingdom holds rotating EU Council Presidency.