Pound Sterling (GBP) Forecast Mixed on Brexit News Today

June 20, 2016 - Written by James Fuller

STORY LINK Pound Sterling (GBP) Forecast Mixed on Brexit News Today

The UK currency has managed a second day of positivity, though this has been marred by close polling data from Survation.

Sterling has soared today, thanks to the fact that the 'In' vote has appeared to be a more likely outcome in the polls.

French Economy Minister Warns that a Brexit ‘would mean the 'Guernseyfication' of the UK'

As we head into the final week of the UK’s long-running EU Membership Referendum race, France’s economy minister Emmanuel Macron has weighed into the debate.

The Gallic money man issued a stark warning to his nation’s press over the weekend, forecasting that a vote for Brexit on Thursday would reduce Britain’s significance on the world stage to that of Guernsey. The weekend newspaper interview saw the economy minister forecast that a vote for Brexit, ‘would mean the 'Guernseyfication' of the UK, which would then be a little country on the world scale. It would isolate itself and become a trading post and arbitration place at Europe's border.’

Macron went on to paint a bleak picture of the nation’s future standing in the event of a ‘Leave’ decision, stating that, ‘if the UK wants a treaty of commercial access to the European market, the British will have to contribute to the European budget like the Norwegians or the Swiss. If London doesn't want that, then the exit will have to be total.’

Macron went on to suggest that, even if the UK votes ‘Remain’ on Thursday, the European project has been fundamentally damaged. The French finmin asserted that, ‘I believe in Europe, but in its reorganisation,’ before going on to posit that, ‘it's the end of an ultra-liberal Europe that has lost its political direction. The European project cannot only be a system of abolishing rules.’

IMF Warns that a UK Exit from the EU is the ‘Largest Near-Term Risk.’

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Elsewhere, the International Monetary Fund (IMF) has described the potential for an EU / UK split as the, ‘largest near-term risk,’ to the domestic economy. The IMF’s annual report on the state of the British financial system also forecast that UK domestic economic activity could be almost 6% lower than it would otherwise have been should UK voters opt to Leave the EU on Thursday.

The upshot of the weekend commentary has seen the implied percentage chance of a vote for Brexit on leading betting exchange Betfair (PPB.L) tumble from over 45% earlier this month to a relatively lowly 28% chance early yesterday. Analysts forecast that the Pound Sterling (currency : GBP) will record gains during today’s session as a result.

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