Pound suffers biggest drop in almost a year as Boris Johnson sparks Brexit fears

Boris Johnson

The pound suffered its biggest drop against the dollar in almost a year after London Mayor Boris Johnson said he will campaign for Britain to leave the European Union, reports The Telegraph.

Sterling fell by as much as 1.5 per cent to $1.4192 against the dollar this morning, marking the biggest drop since March 2015, as experts said the influential Mayor’s decision made a British exit from the bloc more likely.

The pound also fell by as much as 1.2 per cent to €1.2786 against the euro and hit a two-year low against Japan’s yen.

Mr Johnson said David Cameron, the prime minister, had done “his very best” in securing a deal from Brussels on its EU membership.

However, writing in The Telegraph, Mr Johnson said staying inside the union would lead to “an erosion of democracy”.

Mr Cameron will campaign for Britain to stay in the EU. He has described an exit as a “leap in the dark”.

Analysts said Mr Johnson’s decision strengthened the Brexit campaign.

“The concern to the market will be that Johnson is able to provide a leader to an otherwise fragmented campaign for the UK to leave the EU,” said Steven Saywell, global head of FX strategy at BNP Paribas.

“This could potentially tip the balance in the favour of a vote to leave.

“Opinion polls over the week ahead will provide insight into the public’s perception of Cameron’s and Johnson’s news over the weekend and be pivotal to the pound’s performance.”