LONDON — Prime Minister Theresa May on Wednesday took the strange step of effectively denying that the huge plunge in the value of the pound after Britain voted to leave the EU was not down to the Brexit vote.
Speaking at a press conference in London’s Canary Wharf, May was asked about the drop in the pound’s value since last summer and suggested that the pound was already starting to drop before the results of the vote came in on June 23.
“If you look at what happened to sterling, sterling had started to fall back before the referendum vote came through,” she told reporters.
“So there have been adjustments to sterling. It isn’t just that sterling has gone down. We’ve seen currencies move around as currencies do.”
May’s claims have little basis in fact. Sterling traded at roughly 1.48 against the dollar — the most-watched measure of the currency — on the day of the referendum, fluctuating significantly as voting progressed.
It then dropped sharply in the evening, but only after the north-east city of Sunderland voted much more strongly in favour of Brexit than had been expected. Sunderland was seen as a bellwether of voting sentiment, so when it voted 61-39 to Leave, instead of the forecast 55-45, many began to believe Brexit would prevail.
As it became clear that the Leave campaign would take victory, the pound continued to plunge, eventually suffering the biggest single day drop of any major currency in history, losing close to 11% on Friday, June 24. To put that in context, a move of 1% in a major currency is usually considered substantial.
Here is the chart of how the drop looked on the day:
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