Sterling Could Lose Position as Elite Reserve Currency if UK Votes for Brexit, Warns S&P

by Peter Spence, Economics Correspondent

A vote to leave the European Union would threaten sterling’s elite status as an international reserve currency, Standard & Poor’s has warned.

The credit ratings agency has claimed that withdrawing from the EU could “jeopardise the British pound sterling’s position”, as well as the associated benefits to the UK’s triple A credit rating. As such, a Brexit might lead the UK to lose its place alongside the US, eurozone, Japan and China in the reserve currency club.

Frank Gill, an S&P analyst, said that a vote to leave the EU on June 23 could deter “foreign investment and other capital inflows into the UK”. Given the size of the country’s current account deficit, described as “alarming” by one Bank of England policymaker, quitting the EU could put downward pressure on the pound, he warned.

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