With the EU referendum fast approaching, what impact would leaving or indeed remaining in the EU have on the British Pound

Our Brexit calculator looks at the potential outcomes for the pound against some of the major currencies.

The debate surrounding Brexit has already had a significant effect on the pound and is no doubt a major contributor to sterling’s losses in recent months. Compared to its value at the end of 2015, the pound has lost over 10% against the euro. Having traded at over 1.4200 interbank (IB) in December, we now find rates sitting around 1.2700 IB.

Both the ‘Leave’ and ‘Remain’ camps are becoming increasingly vocal in their attempts to win over voters. One thing both camps have in common is they are adding to sterling volatility in the run up to the 23rd June.

The Bank of England joined a swathe of individuals and entities including, the Prime Minister, Chancellor, US President Obama, and IMF in warning of a ‘sharp’ sterling fall if Britain is to leave the EU. Last month the BoE members cut their growth forecast and warned that a significant fall in the pound is expected if we are to leave and that unemployment would likely rise. Similarly, the National Institute of Economic and Social Research (NIESR) warned that sterling could lose up to 20% of its value if we were to leave the EU. The NIESR joins Goldman Sachs and Citibank, who also predict similar losses.

On the other side of the fence, you have Boris Johnson and others who have labelled the Remain campaign as ‘Project Fear’ and have provided their argument as to why Britain would thrive outside of the EU. They question the process why EU funded organisations such as the IMF and high profile figures such as Barack Obama have weighed into the debate, suggesting that David Cameron has cashed in more than a few favours. Boris Johnson has described the contest as “David versus Goliath” with the Remain campaign having the “full power of the establishment behind it” but he insisted that the Leave campaign would win as they have right on their side.

The truth is that nobody really knows what will happen, and there are countless opinions and counter arguments as to what will happen to the pound in the run-up to the referendum.

If we are to believe Project Fear then leaving the EU could result in another 10-15% fall or more in the value of the pound, which would bring GBP/EUR close to the historic lows seen back in 2008. If we do remain, however, which looks the marginally more likely scenario, then rates are expected to rise, but by how much?

Amongst all the chatter, noise and constant news flow surrounding a potential Brexit, it is important to reflect on what the vote could mean for you. We have seen a significant number of enquiries lately regarding locking into a forward contract, to get rate protection from the 23rd June vote.

The real question is, can you afford to wait?

Our Brexit calculator looks at the potential outcomes for the pound against some of the major currencies.

If we fast forward to Monday 27th June, after the referendum result, any of the above outcomes could occur, which may be good or bad for your given circumstances. Can you afford to take that risk?

We can provide rate certainty by locking into an exchange rate now in what could well be a turbulent time going forward.