Pound falls over Brexit fears as polls tighten

The pound fell on Monday after a boost for Brexit backers in Britain’s EU referendum put the polls back to neck-and-neck, as divisions in David Cameron’s Conservative Party turned increasingly bitter.

Trade unions representing six million workers also urged their members to vote to stay in the European Union, warning that an EU exit under a Conservative government would threaten workers’ rights.

Prime Minister Cameron took part in a cross-party event with political opponents Labour, the Liberal Democrats and Greens to accuse “Leave” supporters of “perpetuating an economic con-trick on the British people”.

“While they peddle fantasy politics, in the real world our economy is slowing because of the huge uncertainty hanging over Britain’s economic future,” Cameron said at the “Britain Stronger In” event.

The broadside came after former London mayor Boris Johnson, a leader of the “Leave” campaign who is seen as the most likely successor to Cameron, warned Britain would have to pay more for membership of the EU.

“The risks of ‘Remain’ are massive,” he said, claiming that Britain could also be forced to pay more to solve the migrant crisis and help bail out the eurozone in future, even though it is not a member.

Conservative former prime minister John Major on Sunday had accused Johnson, a charismatic politician with popular appeal, of being a “python” who could not be trusted, in a scathing personal attack.

– ‘A lot more volatility’ –
Financial markets have proved volatile ahead of the June 23 vote that could see Britain becoming the first country to drop out of the EU and have proved particularly so as the campaign has heated up.

Traders on Monday were reacting to two opinion polls over the weekend which put the “Leave” camp just ahead, pushing the WhatUKThinks website’s average of the last six polls to 50-50, excluding undecideds.

The pound fell to 79.05 pence against the euro in Asian trading — its lowest level in three and a half weeks — and stood at around 78.61 pence against the euro at around 0910 GMT.

The pound also fell against the dollar to $1.4439.

“It is becoming extremely worrying for the financial markets and expect more sterling losses if polls continued to indicate a Brexit lead,” said Hussein Sayed, chief market strategist at trader FXTM.

Craig Erlam, senior market analyst at Oanda, said: “With both sides likely to step up their game over the next couple of weeks, I imagine we’ll see a lot more volatility in the pound.”

– ‘Preventing panic’ –
Several of the biggest trade unions also urged their members to vote to stay in the 28-member EU.

The general secretaries of Unite, Unison and the GMB were among 10 union leaders who wrote a letter to The Guardian newspaper claiming that parental leave and holiday rights would be under threat without EU protection.

“Maternity and paternity rights, equal treatment for full-time, part-time and agency workers and the right to paid leave — continue to underpin and protect working rights for British people,” read the letter.

“If Britain leaves the EU, we are in no doubt these protections would be under great threat. The Tories would negotiate our exit and, we believe, would negotiate away our rights,” it said.

In an indication of growing concern, the BBC reported that pro-EU lawmakers were considering ways of using their parliamentary majority to influence negotiations in case Britons vote to leave.

MPs could push for Britain to remain in the EU single market despite losing membership, for example through continued membership of the European Economic Area.

“We would accept the mandate of the people to leave the EU,” the BBC quoted a government minister as saying.

“But everything after that is negotiable and parliament would have its say,” the minister said.

British banks have also begun advising their staff on how to deal with customer queries in case of Brexit, the Financial Times newspaper reported.

It quoted bankers as saying the general guidance was to say “there would be no immediate impact, with the aim of reassuring customers and preventing them from panicking”.