What will happen if UK votes for Brexit?

EU referendum: What will happen if UK votes for Brexit?

Pound has already hit a seven-year low against the dollar – and Brexit could leave it on par with the euro

 Apr 1, 2016

Christopher Furlong/Getty Images

Of all the consequences of the referendum for the UK’s membership of the European Union, the fate of the pound on abstruse currency markets would not appear to rank highly.

With issues relating to immigration, sovereignty and jobs all seemingly at stake, do ordinary people really need to worry about exchange rates as well? In short, yes. Misjudging how the pound will be affected and when to change your holiday cash could leave you getting a significantly worse deal – and in any case the fluctuations in the pound could have a profound effect on the wider economy.

How is the debate affecting the pound?

Badly. When London Mayor Boris Johnson joined the Leave campaign in late February, the pound slumped two per cent to a multi-month low against the euro and to a seven-year low against the US dollar. It went on to record a trough against the greenback of $1.38, compared to a peak of $1.56 in September. It’s currently holding at around $1.42.

The closeness of the polls is making investors nervous that Brexit could really happen – and the uncertainty is weighing on sterling. Just over a week ago the pound hit a two-year low against a basket of other global currencies. It has fallen from a rate of €1.42 against the euro late last year to just €1.25 now.

Will the pound keep falling until the vote?

Video: http://www.theweek.co.uk/70408/eu-referendum-what-will-happen-if-uk-votes-for-brexit

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