UK Edition
Investors pulled £65bn cash out of the UK in March and April as Brexit fears grow
Investors have pulled money out of UK assets at the fastest rate since the financial crisis as they brace for the potential shock of a Brexit vote.
Some £65bn of cash was taken out of the country or converted into other currencies in the two months to April, according to Bank of England figures.
Experts said that the pullback confirmed that money managers were taking the June 23 referendum seriously, and were prepared to take funds out of the UK entirely.
The two month move is the greatest witnessed since early 2009, as the UK was gripped by the global financial crisis.
Alongside a steady depreciation in the pound, around half of which the Bank has attributed to Brexit concerns, the removal of capital revealed by the data are the first signs that investors are worried about the impact of the vote.
City voices have made clear that fund managers are likely to try to “sit out” the month of June, as they reposition away from sterling assets, and park their cash in investments in other parts of the world.
In March alone, this repositioning contributed to the departure of £59bn from UK assets and currency.
A total of £77bn left the sterling system in the half year to April, according to the Bank statistics, which were first reported by Sky News, compared with a £2bn drop in the preceding six months.
The news follows sterling's move at the start of week, when the currency's volatility increased to levels also not seen since the financial crisis, as the pound fell against the dollar and the euro.
Earlier on Tuesday, Roberto Azevedo, head of the World Trade Organisation, joined a chorus of international figures, including Bank Governor Mark Carney and International Monetary Fund (IMF) chief Christine Lagarde, who have said that a British exit from the EU would have damaging economic consequences.
Two polls published on Tuesday show Britons narrowly favour remaining in the EU, in contrast to surveys released on Monday which showed the campaign for Brexit ahead.
Such divergent polls have made it difficult to predict the outcome of the vote on June 23 on whether Britain should remain part of the EU, a choice with far-reaching consequences for politics, the economy, defence, diplomacy and trade.
"While trade would continue, it could be on worse terms," Mr Azevedo said of a vote to leave the EU.
"Most likely, it would cost more for the UK to trade with the same markets - therefore damaging the competitiveness of UK companies," Azevedo said in a prepared text of his speech.
Britain gets preferential export terms for 60 percent of the goods it sells abroad -- including the 47pc of its exports that go to the EU and the 13 percent that go to other countries with EU trade deals.
"The implication is that UK exporters would risk having to pay up to £5.6 billion each year in duty on their exports."
Azevedo has already said that Britain would have to renegotiate its relationship with the rest of the World Trade Organization, which could take years or decades, and he reiterated that it would not be a simple job.
"Key aspects of the EU's terms of trade could not simply be cut and pasted for the UK," he said.