Pound And FTSE 100 Fall As Brexit Polls Shift

 The pound was trading just below $1.42 on Tuesday morning

Germany warns of greater market volatility if the UK backs Brexit, with the latest polls suggesting Leave in the lead.

The pound has continued its slide against other major currencies and the FTSE 100 has slumped below the 6000 barrier as a growing number of polls suggest the UK on course to leave the EU following next week's referendum.

Uncertainty over the referendum has coincided with growing market fears for the health of the global economy - with a widely expected rate hike by the US central bank tomorrow now expected to be put on hold.

Analysts at Barclays said: "The (rate-setting) committee was actively preparing markets for a June-July rate hike until the release of the May employment report ... the abrupt slowing in employment and falling long-run inflation expectations should raise alarm bells, and risk management concerns suggest delaying action until after the outcome of the UK referendum."
 




A YouGov poll for The Times puts Leave seven points ahead of Remain while a pair of ICM polls for The Guardian has Leave six points in front.
ORB in the Daily Telegraph has Leave one point ahead.

Some economists fear a UK exit would tip Europe back into recession though others have pointed to benefits for the UK over the longer term.

The pound was 0.6% lower against the dollar at $1.41.8 on Tuesday - extending eight-week lows - while it also shed 1% of its value against the yen.

The euro was at  a three-year low against the Japanese currency.

On stock markets the FTSE 100 extended its losing streak and was 1.2% lower in morning trading at 5968 while losses were heavier in Germany and France.

Japan's Nikkei had earlier lost a further 1% after a 3% decline on Monday.

Banking stocks have been among those bearing the brunt of the losses in recent days - with shareholders fretting about the possibility of a longer period of low or negative interest rates, given weaknesses in the global economy.

Germany - Europe's biggest economy - said on Tuesday that the Brexit referendum was a factor behind the current uncertainty.

Jens Spahn, a top official in the country's finance ministry, told German broadcaster ARD that finance and equities markets could see even greater volatility if the Leave camp wins.

He said the ministry was bracing for a variety of scenarios, depending on the outcome of the British referendum, and the extent of the market reactions but he declined to give any details.