Anticipating a possible British exit from the EU, Great British Pound (red graph) has declined sharply for two years, not having recovered from its plunge in 2007/ 08. It now hits an all-time bottom.
Referendum day (23 June) is shown by the vertical bar. The pound fell sharply on Friday 10 June, as opinion polls show the Exit camp moving ahead of the Remains.
The economics all stack up against Exit, but the immigration issue is the factor bolstering the Exit camp. In 2015, net immigration into the UK was 333,000. Continue that trend for 20 years, with consequent increase due to births, would increase the population of Britain by over 7 million. Already there are 8 million of foreign birth in the country, out of a total population of 64 M.
Would leaving the EU solve the immigration crisis? As the polling date nears, the economic argument will become more persuasive and the actual referendum will be governed more by the head than the heart.
I think a bet on the GBP just before referendum day is warranted. Even if the vote is to leave, the pound has probably already fallen enough. The chart shows the EUR/USD in blue.
No comments:
Post a Comment