The current week has seen the UK Referendum newsmill in full force, with accusations, appeals and interpretations flying out at all angles as the arguments intensify.
Pound Sterling Dips against Euro as Monday Marked by High Profile Resignation of BCC Director General
The week started with a bang, when in the wake of previously voicing his support for the ‘Out’ campaign, BCC Director General John Longworth announced his resignation.
The news came due to the BCC requiring its officials to remain politically neutral, which made Longworth’s words deliberate contempt of this policy. Longworth accepted his mistake, but the event nonetheless put a dampener on future potential declarations of support for either the ‘In’ or ‘Out’ side.
Elsewhere, an overlap from Sunday brought further influence from former Bank of England (BoE) Governor Mervyn King, who cited the economic stability of the Eurozone as a deciding factor on which way the bulk of the UK vote would fall.
The Pound Sterling to Euro (GBP/EUR) exchange rate edged slightly lower in response to this development.
BoE Questioning Dominated Tuesday’s Referendum Focus, GBP/EUR Fluctuates
After a relatively quiet start, Tuesday saw a glut of ‘Brexit’ news, from a wide range of fields. On the less-impactful end of the spectrum, news emerged that the office of ‘Out’ campaigner Boris Johnson had been sending a ‘gag order’ email to his staff with regards to expressing opposition to the London Mayor’s stance. Johnson quickly distanced himself from the apparent orders.
On the statistical front, Oxford Economics published a report that estimated a 1% reduction in the size of the UK economy in the event of a ‘Brexit’, which would be accompanied by diving share prices.
The big news of the day, however, came out of the Houses of Parliament. In a meeting with MPs, BoE Governor Mark Carney and Deputy Governor Jon Cunliffe spoke deliberately on what the BoE thought the UK Referendum meant for the economy. While both policymakers retained a neutral stance, MPs were baying for blood and quickly accused Carney of breaking form and siding with the ‘Remain’ campaign, merely because the Governor accurately pointed out that the UK leaving the EU was the ‘biggest domestic risk’ it currently faced.
Amid dramatic calls for his resignation, Carney held his ground and stated that whichever voting outcome was achieved, there would be a great deal of work required in order to set the economy on the right track for the future.
The fresh commentary left the Pound Sterling to Euro (GBP/EUR) exchange rate fluctuating, although movement was somewhat limited ahead of the hotly-anticipated European Central Bank (ECB) interest rate decision.
Her Majesty Dragged into ‘Brexit’ Row on Wednesday, But Pound Sterling Gains Despite Further BoE Input
After the political circus of Tuesday, Wednesday’s Parliamentary developments were significantly more reserved.
The BoE was once again in Parliament, with policymaker Dame Clara Furse supporting Carney’s previous statement that economic uncertainty was bad for business. As expected, this was not without criticism; questioning MPs picked up on the fact that Furse hadn’t included ‘Brexit’ on her list of risks that was supplied to the questioning committee.
Elsewhere, the Queen was labelled by the Sun as a clear supporter of ‘Brexit’ in a headline story, something quickly refuted by all parties involved in the supposedly accurate article. In addition to denying the accusations, Buckingham Palace brought complaints against the tabloid.
The ‘Brexit’ news didn’t prevent the Pound from gaining on the Euro (GBP/EUR) however as investors chose to fixate on the UK’s better-than-expected Industrial/Manufacturing Production reports.
Business as Usual Yesterday with Brief Arguments from Both Sides, ECB Announcement Triggers Violent GBP/EUR Movement
Thursday was one of the most measured days of the week for UK Referendum news, as asides from the Sun defending its sensational and dubious story, the only other news related to the ‘In’ and ‘Out’ campaigns.
On the former side, the PM claimed that the ‘Leave’ campaign was willing to sacrifice countless UK jobs to achieve their goals, while House of Commons Leader Chris Grayling asserted that if the ‘In’ campaign won, the agreed-upon referendum terms could damage the UK instead of bettering it.
Another ‘Remain’ development came from a diverse collection of scientists headed by Professor Stephen Hawking, who warned that an ‘Out’ vote would dramatically reduce the amount of research performed in the UK.
Volatility in the Pound Sterling to Euro (GBP/EUR) exchange rate instead occurred as a result of the ECB policy announcement, with the introduction of interest rate cuts and expanded QE seeing the pairing surge before plummeting as the ECB President indicated that the central bank was out of policy moves.
Blair and Boris Close Off the Week Today
Finally, today’s news related to the Referendum has again been relatively mild, with former PM Tony Blair asking that the ‘In’ campaign shows more ‘muscularity’ in its output, and Johnson identifying an ‘Out’ vote as something with no apparent downsides.
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 1.2870 and the Euro to Pound Sterling (EUR/GBP) exchange rate was trending in the region of 0.7771 today.