The British pound’s losses deepened in October on worries that a “hard Brexit” would restrict banks’ access to the single market, leading to speculation that major financial institutions may relocate out of London.
Bankers’ “hands are quivering over the relocate button,” wrote Anthony Browne, CEO of the British Bankers’ Association, in response to Prime Minister Theresa May’s call for a hard exit from the European Union.
As one of the world’s major financial centres, London would be devastated by a mass exodus of banks over Brexit fears. Financial institutions pay more than £60 billion in taxes each year, making them a huge source of revenue for the British economy.
Concerns about an exodus of banks have weighed on the British pound, which has declined a staggering 18% against the US dollar since the June 23 Brexit vote. The Bank of England (BOE) is already preparing for the blowback, having eased monetary policy in August for the first time since the financial crisis.
The GBP/USD e...