Bank of England warns Brexit could lead to 'sharp' falls in sterling

Pound lower against dollar and euro

The Bank of England has warned the value of the British currency could fall "sharply" if the UK votes to leave the EU in the upcoming referendum next week.

In the latest minutes of its Monetary Policy Committee (MPC) meeting, where the Bank once again decided to keep interest rates unchanged at record lows, it also warned of the potential implications of a Brexit on the UK economy. The MPC said: "On the evidence of the recent behaviour of the foreign exchange market, it appears increasingly likely that, were the UK to vote to leave the EU, sterling's exchange rate would fall further, perhaps sharply." This year to 17 June, sterling has dropped 3.1% against the US dollar, trading at $1.4228, and it is 6.6% lower against the euro at €1.266...