Brexit: vulnerable pound may hurt UK bond's haven status
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THE UK government-bond market's reputation as a haven in times of global crisis is being put in jeopardy by its currency's vulnerability to the nation's vote on European Union membership.
From World War II through the euro crisis in 2012, gilts rallied on the back of Britain's status as a Group-of-Seven nation with a stable government, a global currency and a capital city doubling as one of the most vital money centres. The UK's appeal only grew in recent years, to the point where foreign investors own 27 per cent of its debt, a record £449 billion (S$894 billion). So the thought of the pound crashing, should Britain choose this week to exit the EU in a so-called Brexit, is causing more than just lots of hand-wringing.
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