British pound plunges as Cameron makes pro-EU case

LONDON -- Uncertainty over Britain's future in the European Union sent the pound plunging Monday, as Prime Minister David Cameron tried to shore up support for remaining in the bloc when the U.K.

See Full Article

holds a referendum in June.

The pound fell 1.7 per cent to $1.4166, and also sagged 0.5 per cent to 1.28 euros, as bookmakers shortened the odds on a vote to leave - though betting markets still favour a "remain" victory.

Simon Smith, chief economist at FxPro, said the next four months "won't be a fun time" for the pound, which has weakened in recent months.

"It's more the uncertainty that will weigh on the currency, rather than investors taking a view on the outcome and the implications for the economy, which are hard to argue either way," he said.

Many big businesses have warned that leaving the EU - with its open internal market of 500 million people - would hammer the British economy. But London Mayor Boris Johnson, a high-profile supporter of an "out" vote, said fears of economic catastrophe were "wildly exaggerated."

He likened he warnings to those who had said that if Britain did not join the euro single currency, London's City financial district would suffer and "great mutant rats would gnaw the faces of the last bankers."

"It didn't turn out to be true. On the contrary, the City of London is overwhelmingly the preponderant financial center here in this part of the world, indeed it is the biggest on earth," Johnson said during a question session at City Hall.

The rhetorical stakes shot sky-high as politicians began a four-month battle to sway British voters ahead of the June 23 referendum, with the opposing sides battling over whether EU membership made Britain more or less safe from terrorist attacks.

Former Conservative leader Iain Duncan Smith said Sunday that the EU's "open border," and the inflow of millions of migrants from the Middle East and Africa, made it more likely terrorists could slip into the UK - even though Britain is not part of the EU's borderless Schengen zone.

But Defense Secretary Michael Fallon argued that EU membership made the U.K. safer.

"It is through the EU that you exchange criminal records and passenger records and work together on counter-terrorism," Fallon told the BBC Monday.

"We need the collective weight of the EU when you are dealing with Russian aggression or terrorism. You need to be part of these big partnerships."

Cameron was due to make his case in the House of Commons Monday, arguing that a deal he struck Friday with 27 other EU leaders gives Britain "special status," exempting the U.K. from ever-closer political bonds with the bloc and protecting the rights of the pound against the euro single currency used by 19 EU countries.

Cameron's governing Conservative Party is deeply split on the issue, with as many as half of Tory legislators in favor of leaving the EU - a prospect known as Brexit.

They include Johnson, whose decision to back Brexit was a big boost for the "leave" campaign.

In a column for Monday's Daily Telegraph newspaper, Johnson wrote that the referendum offered a "once-in-a-lifetime" chance for real change.

Unlike some dyed-in-the-wool Euroskeptics, who want Britain to leave the bloc entirely, Johnson suggested his goal is to renegotiate a new relationship with the EU after a Brexit vote.

"There is only one way to get the change we need - and that is to vote to go; because all EU history shows that they only really listen to a population when it says 'no,'" he wrote.

Six of the 23 members of Cameron's Cabinet also have announced they will campaign for an exit, though most of the senior figures say they will support the prime minister.



Advertisements

Latest Economic News

  • Climate change, rail talks bring opportunities to Churchill

    Economic CTV News
    CHURCHILL, Man. - A northern Manitoba community on the shore of Hudson Bay is having an identity crisis. The port of Churchill was once bustling with ships laden with grain bound for markets. Now, the ships docked at the port are bringing essential supplies in rather than transporting anything out. Source
  • NAFTA's open borders mean Canadian exporters are caught in trade war crossfire: Don Pittis

    Economic CBC News
    Soybean farmer Philip Shaw is suffering from the effects of the North American Free Trade Agreement. Ironically, as U.S. President Donald Trump threatens to up the ante with China, the NAFTA deal that he has called "the worst trade deal ever" means Canadian exporters like Shaw are suffering the backwash from sanctions never intended for them. Source
  • How the Ritchie brothers turned a business headache into a massive opportunity

    Economic CBC News
    Ritchie Bros. Auctioneers is a global corporation and a Canadian business success story, but it started off as a used furniture shop with a big problem: The bank had called in a $2,000 loan. It was the 1950s and the three Ritchie brothers — Ken, Dave and John — had taken over the family furniture store in Kelowna, B.C. Source
  • Ottawa fails to secure new buyer for Trans Mountain pipeline by deadline

    Economic CTV News
    OTTAWA -- The federal government is set to become the official owner of the Trans Mountain pipeline expansion after failing to quickly flip the project to another private-sector buyer. Pipeline owner Kinder Morgan had been working with the government to identify another buyer before July 22. Source
  • Ailing auto CEO Marchionne had multiple roles, no script

    Economic CTV News
    MILAN -- Sergio Marchionne's achievements as one of the automotive world's most charismatic chief executives include the bold trans-Atlantic merger of Italian carmaker Fiat and U.S. No. 3 Chrysler after he restored both to health. Source
  • 'Worse than oil': Sask. farmers say Husky downplaying damage from salt water leak

    Economic CBC News
    The Saskatchewan farming family that owns the land where salt water leaked from a Husky Energy line says the company is "underplaying" the damage. Ken and Nick Wourms have released aerial photos that show yellowed trees and vegetation in what appears to be the path of the leak, which spilled salt water into the Englishman River, about 500 metres from the leak site near Turtleford, Sask. Source
  • CMHC moves to make it easier for self-employed to get a mortgage

    Economic CBC News
    Self-employed Canadians seeking to buy a home may soon find it easier to secure a mortgage after changes announced by Canada Mortgage and Housing Corp. CMHC said self-employed people make up about 15 per cent of Canada's population, but they may have difficulty qualifying for a mortgage because their incomes may vary or be less predictable. Source
  • Investigating sales tactics and condos rush to ban weed: CBC's Marketplace consumer cheat sheet

    Economic CBC News
    Miss something this week? Don't panic. CBC's Marketplace rounds up the consumer and health news you need. Want this in your inbox? Get the Marketplace newsletter every Friday. Telecom sales tactics Have you ever felt pressured by employees selling TV, internet and wireless services? The CRTC is inviting you to raise your complaints online or at a public hearing starting Oct. Source
  • Pipeline protesters to hold news conference after eviction notice

    Economic CTV News
    BURNABY, B.C. -- Protesters at an anti-pipeline camp in Burnaby, B.C., are set to hold a news conference to relay their side of the story this morning, instead of complying with an eviction notice handed down by the city. Source
  • Pipeline protesters defy city-issued eviction order, say they'll meet with officials

    Economic CTV News
    BURNABY, B.C. -- Protesters at an anti-pipeline camp in Burnaby, B.C., say they will meet with officials to discuss safety measures, but will not comply with a city-issued eviction order. The City of Burnaby says there are safety concerns surrounding "Camp Cloud," including a two-storey watch house and a fire that the protesters describe as sacred and ceremonial. Source