The current week has featured a diverse range of contributors to the ‘Brexit’ argument, although the condition of the UK steel industry has been an overriding negative for the ultimate appeal of the Pound.
Unlike last week, the Pound began the week on a positive note, but has failed to hold onto its advantage against the Euro (GBP/EUR) in the long run due to waning confidence in the UK’s economic future.
Claims of Criminal Entries into the UK Started Off Monday’s GBP Movement
On a relatively low-key note, Monday’s UK Referendum news was limited to the claim that EU membership had compromised the UK’s security. According to the outlet, around 50 ‘dangerous criminals’ have entered the UK due to EU freedom of movement laws, which the media source cited as a valid reason for the UK leaving the EU.
As a clear piece of foreshadowing, the future of the Port Talbot steelworks was called into question, with board members of owners Tata scheduling a meeting for Tuesday to decide what to do with their unprofitable assets in the UK steel industry.
Quiet Start Overshadowed by Tuesday’s Glut of UK Referendum Information
Having been relatively unmoved by Easter Monday’s occurrences, the Pound dived overall against the Euro and others when news emerged from India over the fate of the UK’s steelworks. In order to resolve the issue of unprofitable UK steel operations, Tata elected to sell off its UK steel manufacturing plants.
The news sent shockwaves through the communities built up around the steel industry, with serious questions being asked about the government’s commitment to preserving UK jobs and ensuring that steel remained a relevant and viable industry in 2016.
Elsewhere, Education Secretary Nicky Morgan warned that owing to the economic and political turmoil likely caused by a ‘Brexit’, the nation’s youth would be seriously disadvantaged by a vote to exit the EU.
Adding to the ammunition of the ‘Remain’ campaign was a story concerning UK expats in the EU, which focused on the fact that a ‘Brexit’ would likely result in an ‘exodus’ of UK expats from the continent, owing to the possibility that access to healthcare would be cut off to non-EU citizens.
One of the other two stories of the day concerned Monday’s contributions; in response to the claims of criminals easily accessing the UK thanks to EU free movement laws, the ‘Remain’ campaign called the report ‘scaremongering of the worst kind’.
Finally, the Bank of England (BoE) offered another prediction for the potential impact of a ‘Brexit’, stating that if the UK left the EU the likelihood of a credit crunch would be greatly increased. As a counterpoint, however, the BoE stressed that it thought UK banks were in a better state to weather such an outcome than they had been compared to the financial crash of the late 2000’s.
Technicalities of ‘Brexit’ were Wednesday’s Focus, as well as Heated Steel Futures Debate
Wednesday represented another relative low-point in terms of UK Referendum activity, while the still-burning furnaces of the Port Talbot steelworks remained in the background as a source of gathering political unrest.
Former Cabinet Secretary Lord Gus O’Donnell raised some technical points on how the UK would leave the EU, by stating that against EU rules, it would potentially take a lot longer than 2 years for the UK to complete the transition out of the multi-national agreement.
The steel situation reached something of a head, as while the still-in-recess Government scrambled to get to grips with mass discontent, some outlets speculated on whether the UK leaving the EU would benefit the steel industry. The biggest focus on this, however, came on Thursday.
UK Football Drawn into Referendum Debate on Thursday; Questions Emerged over Government Sincerity for Steel Workers
Thursday was an interesting day in terms of Referendum news, as the potential consequences of a ‘Brexit’ were expanded to an unusual area and progress was made towards establishing official ‘In’ and ‘Out’ campaigns.
In the former case, it was estimated that if a ‘Brexit’ occurred, UK football would be greatly deprived on account of over 400 players potentially losing their rights to play in the UK. However, the other side of the argument was that without an influx of overseas talent, the nation’s ‘home’ players would be allowed to flourish without the added competition.
The other piece of non-steel related news was that both ‘In’ and ‘Out’ groups were pitching to the Electoral Commission for grants that would allow each campaign to spend up to £7m to promote their cause. Only one ‘In’ contender currently exists, but at the time of writing there was fierce competition between the various squabbling ‘Out’ groups.
The most notable development yesterday came from the steel industry, however, as the crisis situation came to a head. A petition from Jeremy Corbyn for the House of Commons to return from recess and confront the steel crisis reached over 100,000 signatures, although because Parliament was still on Recess until April 11th, the event had little overall effect.
The government came under fire from various sources for ostensibly refusing to nationalise the steel industry, with Business Secretary Sajid Javid taking the brunt of the criticism. This was due to Javid making an official visit to Australia this week; the Business Secretary soon cancelled his plans but failed to return to the UK in the predicted timeframe.
Today’s GBP/EUR Movement Dictated by UK’s Involvement in EU Steel Tariffs
The Pound has remained soft against the Euro today, with the lack of a resolution to the contentious steel issue remaining a limiting factor on the UK currency.
Having returned to the UK, Javid is expected to visit Port Talbot today, although he may meet a frosty reception due to recent reports on the government’s motivation for keeping steel mills running in the UK.
It has transpired that in the past, far from encouraging the EU to raise tariffs on Chinese steel ‘dumping’ and raise the appeal of UK and EU steel, the government has allegedly been the ‘ringleader’ in securing these over-competitive sources of steel for the UK, as a way of keeping construction costs down and cosying up to Beijing as part of the ‘Osborne Doctrine’, dissenters claim
Elsewhere, the National Living Wage has come into effect, which may lead to increased migration into the UK on account of improved conditions for previously low-paid workers.
That’s it for the UK Referendum roundup so far today, but we’ll be back next week with all the latest UK-EU news to keep you up to speed with the situation as it unfolds.
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending in the region of 1.2570 and the Euro to Pound Sterling (EUR/GBP) exchange rate was trending in the region of 0.7957 today.