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

  • How to stack your online savings on Black Friday and Cyber Monday

    Economic CTV News
    CTVNews.ca has collected a handy list of tips, tricks, apps and websites that you can stack up to save big during Black Friday, Cyber Monday and the remainder of the Christmas season. With Black Friday quickly becoming one of the hottest shopping days of the year, retailers are already beginning to launch their sales (or at least, their sale websites). Source
  • Competition Bureau wants answers from Sears liquidators on alleged price mark-ups, says report

    Economic CBC News
    The Competition Bureau is investigating allegations that some merchandise was marked up in price for Sears Canada liquidation sales, says a report by the court-appointed monitor for the retailer. Since Sears liquidation sales began, CBC News has heard complaints from several shoppers who found marked-up price tags. Source
  • Don't expect government meddling in the housing market to fix it: Don Pittis

    Economic CBC News
    This week, as the federal Liberals roll out their latest plan to fix housing in Canada, they face a Sisyphean task, one they're unlikely to complete. While the new government strategy makes a welcome political gesture toward solving problems created by the high cost of housing, there is evidence that the problem is bigger, more complicated and more intractable than any government can handle, even with this latest decade-long multi-billion-dollar plan. Source
  • Chief Liberal Party fundraiser tied to $8M loan to offshore trust in Cayman Islands

    Economic CBC News
    Newly discovered documents from the Paradise Papers show the Liberal Party's top fundraiser, Stephen Bronfman, was directly linked to companies that were owed millions by an offshore Cayman Islands trust well into the 2000s — despite his strong denials he had any involvement in the trust after 1998. Source
  • Retailers look to woo shoppers from rivals as Amazon grows

    Economic CTV News
    NEW YORK - Toys and TVs at J.C. Penney, Barbies at Best Buy, kitchen appliances like wine refrigerators at B.J.'s. As the holiday shopping season officially kicks off Thursday, shoppers may find some surprises at their favourite stores. Source
  • Asian stocks flat as support grows for U.S. interest rate hike

    Economic CTV News
    SEOUL, Korea, Republic Of - Asian stock markets were largely flat on Thursday with investors in the U.S. markets going on a Thanksgiving holiday and the Fed minutes largely in line with investor expectations that the Fed will soon raise interest rates for a third time next month. Source
  • First LNG shipment leaves B.C. for China as industry looks to expand exports

    Economic CTV News
    SURREY, B.C. -- FortisBC says it has shipped 950 gigajoules of liquefied natural gas from Vancouver to China, marking the industry's first shipment to the Asian country. The move is part of a pilot project aimed to determine long-term feasibility of B.C. Source
  • U.S. commission alerted to review allegations against TripAdvisor

    Economic CTV News
    BOSTON -- The U.S. Federal Trade Commission could take action against TripAdvisor after the Massachusetts-based travel company was accused of deleting hotel reviews that contained allegations of rape and other crimes. Several people told the Milwaukee Journal Sentinel this month they were sexually assaulted at Mexican hotels and resorts but the online reviews that mentioned the crimes were taken down. Source
  • Trump SoHo to shed 'Trump' amid reports of sagging business

    Economic CTV News
    NEW YORK -- The Trump SoHo hotel is dropping the name it shares with the U.S. president. The Trump Organization said Wednesday that it is ending its licensing deal with the New York hotel amid reports that the property has struggled to attract business. Source
  • Wellsite pipeline leak spills 560 barrels of oil into northern Alberta swamp

    Economic CTV News
    CALGARY - The Alberta Energy Regulator says a pipeline owned by Calgary-based Mount Bastion Oil & Gas Corp. has leaked about 560 barrels of an oil and water mixture at a northern Alberta wellsite. AER spokesman Jordan Fitzgerald says the regulator has staff supervising cleanup by the company at the site about 65 kilometres northwest of Red Earth Creek, which is about 420 kilometres north of Edmonton. Source