U.K. Bank Sterling Asset Exposure Fell Most Since 2009 in March

Has Brexit Made Firms Reluctant to Invest?

U.K. banks reduced their exposure to sterling assets in March by the most since the height of the financial crisis in January 2009, according to Bank of England data.

Sky News reported earlier on Tuesday that the 59 billion-pound ($86 billion) monthly decline in financial institutions’ holdings of sterling assets may have been driven by volatility ahead of Britain’s European Union referendum, citing Simon Ward, chief economist at Henderson Global Investors. March’s numbers were originally published in late April. The most recent statistics, released on June 1, showed the monthly change in favor of non-sterling assets slowed to 6.3 billion pounds in April.

The pound has weakened ahead of Britain’s June 23 vote as polls show the outcome is too close to call and a so-called Brexit from the EU is possible. The U.K. currency has been a gauge of sentiment throughout the referendum debate, sliding to a seven-year low in February before rallying as surveys in April and May showed the ‘Remain’ camp pulling ahead.

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