Pound Plunges as Cameron Makes Pro-EU Case in UK Parliament

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. holds a referendum in June
Pound Plunges as Cameron Makes Pro-EU Case in UK Parliament
In this Wednesday, Dec. 2, 2015 file photo, British Prime Minister David Cameron leaves 10 Downing Street in London, to go to the Houses of Parliament. AP Photo/Matt Dunham
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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. holds a referendum in June.

The pound fell 1.7 percent to $1.4166, and also sagged 0.5 percent to 1.28 euros, as bookmakers shortened the odds on a vote to leave — though betting markets still favor 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.”

London Mayor Boris Johnson makes a statement outside his home in London, Sunday Feb. 21, 2016. (AP Photo/Tim Ireland)
London Mayor Boris Johnson makes a statement outside his home in London, Sunday Feb. 21, 2016. AP Photo/Tim Ireland