Tuesday 25 October 2016

Pound falls on surprise pro-Brexit poll result

Eshe Nelson

Published 01/06/2016 | 02:30

Photo: Bloomberg
Photo: Bloomberg

The pound suffered a sudden drop yesterday after a new poll showed a jump in support for the campaign to take Britain out of the European Union.

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It spooked some investors who had thought that the result was a foregone conclusion in favour of the 'remain' side.

Sterling fell against the euro and 15 other major after the ICM opinion polls released yesterday by the 'Guardian' newspaper showed a lead for the 'leave' camp.

A phone survey showed 45pc of respondents supported leaving, 42pc for 'remain' and 13pc were undecided.

It is a contrast to a previous survey which put the pro-EU camp ahead. An online poll also put the Brexit camp ahead.

The question now is whether the results should be seen as a one-off outlier following a raft of polls showing the 'remain' camp in the lead, or whether it marks the start of a broader shift toward the 'leave' campaign.

The drop in the pound shows just how sensitive investors are to shifts in public opinion, highlighting the risk of more volatility with just over three weeks of the campaign left to go.

"The market has moved to reprice in higher risk of Brexit," said Lee Hardman, a foreign-exchange strategist at Bank of Tokyo-Mitsubishi UFJ in London.

"But so far it is only one poll's result. If repeated in other polls it would result in a more significant decline for the pound."

The pound dropped 0.9pc to 76.79 pence per euro.

The ICM survey is the latest in a series of boosts for the 'leave' campaign, halting a recovery in sterling in its tracks.

The UK currency was the best performing Group-of-10 currency in the past two weeks as investors took heart from polls showing a clear lead for the 'Remain' campaign. (Bloomberg)

Irish Independent

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