The pound has hit a seven-year low against the dollar, as fears about the UK leaving the European Union sparked nervousness among investor.
Yesterday the pound dropped by 2.4 per cent at its lowest to hit $1.4059, lower than the $1.4079 low on 21 January. The fall marked its weakest rate against the dollar since March 2009, when the Bank of England cut interest rates to 0.5 per cent.
The drop yesterday establishes the pound’s position as the worst performing currency in 2016 so far, being down 3 per cent since the start of the year.
The currency weakness came as Moody’s warned a Brexit would be more negative for the UK economy than positive.
It warned that leaving the EU could lead to a downgrade of the UK’s credit rating, adding that the result of the referendum on 23 June is “too close to call”.