Sterling weakens as odds of pro-EU vote slip to 75%

Sterling weakened yesterday for the first time in nine days against the euro, slipping 0.5% to 77.85p, amid further evidence the currency is being driven by the UK’s vote on June 23 whether to remain in the EU.

The probability of the UK voting to stay in — dubbed a Bremain as opposed to a Brexit — fell slightly yesterday to 75% from a record high 80%, according to bookmaker Paddy Power.

“A Bremain is still a large favourite,” a spokesman told the Irish Examiner.

The bookmaker is not expecting more explosive interventions in the UK debate after US President Barack Obama last weekend slapped down Boris Johnson, the leading Brexit proponent, the spokesman said.

Sterling also halted a three-day gain against the dollar as data showed UK economic growth slowed in the first quarter.

It climbed to the highest level against the US currency since February amid signs the remain camp was pulling ahead in the ‘in or out’ campaign.

The referendum has dominated the pound’s direction since the start of the year, acting as a barometer of sentiment.

The OECD yesterday said the UK faces a “major negative shock” if it leaves the EU.

“UK growth conditions have not been the key driver of the currency this year,” said Manuel Oliveri, a foreign-exchange strategist at a Credit Agricole unit in London.

The pound fell 0.3% to $1.4540 yesterday having gained 1.8% in the previous three days. Growth slowed to 0.4% from 0.6% in the final three months of 2015.

A poll on the referendum published yesterday suggested 45% of UK voters would vote to remain in the EU, with 38% voting to leave.