World Economy

UK Markets Pounded

UK Markets PoundedUK Markets Pounded

Wherever you look, Britain’s financial markets are creaking. The pound is at the weakest level since 2010 against the dollar and on its worst-ever weekly losing streak against the euro. The FTSE 100 index of shares has fallen to the lowest since 2012 and the bond market’s inflation outlook is the worst since 2009. Against that backdrop, futures traders have pushed back expectations for a Bank of England rate increase by about eight months since the turn of the year, according to a Morgan Stanley index, Bloomberg reported.

UK assets are being hurt by a litany of woes including falling commodity prices and an uneven economic recovery. Investors are also preoccupied by the risks of a possible exit from the European Union, even if the full details of the vote, including the date itself, are yet to be defined.

“It’s very difficult to say right now that we’re at the end because of the politics -- it’s not just about economics and interest-rate differentials,” said Jane Foley, a senior foreign-exchange strategist at Rabobank International in London. “The referendum has really amplified the bad news on the economic front.”