Tags: brexit | pound | labor | opposition labor

UK's Opposition Labor Seeks Backing for 'In' Camp as Fear of Brexit Hits Pound

Image: UK's Opposition Labor Seeks Backing for 'In' Camp as Fear of Brexit Hits Pound

Monday, 13 Jun 2016 05:43 AM

The campaign to keep Britain in the European Union sought on Monday to win over undecided Labour voters who could swing the result of a referendum in 10 days, as the pound fell to an eight-week low on fears the chances of Brexit had increased.

Concern over the prospect of Britain voting to leave the bloc on June 23 rattled global markets on Monday, sending Asian and European shares sharply lower, and betting odds showed the likelihood of an "In" vote had fallen.

With opinion polls still close, the "In" campaign focused on the opposition Labour Party on Monday. Conservative Prime Minister David Cameron was not holding any high profile events.

Labour supporters are seen as key to securing an In vote, as Conservative voters are deeply divided on the EU.

Former Labour prime minister Gordon Brown, credited with making a decisive last-minute intervention in a Scottish independence referendum two years ago, will launch what the In campaign described as a "Labour fight-back."

After a late surge of separatist support, the 2014 referendum saw Scots vote 55 percent to 45 percent to maintain their 308-year-old union with England.

"From now until 10 p.m. on June 23rd, we will not rest and I will not stop explaining why nine million Labour voters have most to gain from remaining in the EU," Brown will say in a speech in Leicester, central England, on Monday.

"Voting to Remain is about a positive, stronger future and is the alternative to a Tory (Conservative) Brexit. It is stronger for jobs, for rights at work and maintaining a British voice on the world stage."

The anti-EU UK Independence Party has made inroads in Labour's traditional northern English stronghold.

While the party officially backs In, its leader Jeremy Corbyn has had to deny criticism he is not doing enough to campaign for that outcome. Labour have argued the media coverage has been too dominated by the battle within Cameron's Conservatives over Europe.

 

VOLATILITY

Most opinion polls show Britons are still evenly divided over which way to vote, but an ORB poll published late on Friday which put the "Leave" camp 10 points ahead of "Remain" has spooked markets.

The world economy is looking shaky and concerns that a vote for Brexit could tip Europe back into recession have lurked in the background for weeks.

Those concerns came to the fore on Monday, however, as European shares fell 1.5 percent and Asian stock markets logged their biggest falls in four months.

Based on how people are betting, the likelihood of an In vote fell to 64 percent on Monday, down around 14 percentage points from last week, according to odds supplied by Betfair.

The pound fell to an eight-week low while the cost of hedging against big swings in its exchange rate against the euro over the coming month jumped to a record high.

"We expect incoming polls to move the pound more aggressively than before," said Charalambos Pissouros, senior analyst at IronFX Global.

"If new polls continue to show a tight race between the two campaigns as we approach the voting day, the outcome is likely to become even more uncertain and hence, volatility in sterling is likely to heighten further."

© 2017 Thomson/Reuters. All rights reserved.

 
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The campaign to keep Britain in the European Union sought on Monday to win over undecided Labour voters who could swing the result of a referendum in 10 days, as the pound fell to an eight-week low on fears the chances of Brexit had increased. Concern over the prospect of...
brexit, pound, labor, opposition labor
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2016-43-13
Monday, 13 Jun 2016 05:43 AM
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