Following an announcement from London's popular mayor Boris Johnson on Sunday, the British pound quite literally took a pounding during Monday trading, plunging 2.1 percent, the most the currency has fallen in almost seven years, according to The Wall Street Journal.
In his declaration, Johnson stated that he would be backing the campaign for Britain to leave the European Union, popularly dubbed as the "Brexit," which is set to be determined in a June 23 national referendum. Johnson is so far the most prominent politician to support the movement.
The market's reaction to the issue, however, seemed very evident. At one point during the day's trading, the pound plunged 2.1 percent against the U.S. dollar, trading at $1.41. It also fell 1.1 percent against the Euro, reports UPI News.
Such figures exhibit the most prominent drop in the formidable currency since 2009. The decline of the pound, however, has been going on for some time, with the currency declining more than 17 percent against the U.S. dollar during the past 18 months.
Michael Hewson, chief market analyst at CMC Markets in the U.K., believes that though there is no guarantee that the U.K. will exit the E.U., the prospect of it happening, as well as the underlying reasons involved, has affected investors, reports ABC News.
"There's still no guarantee that the U.K. will exit the European Union, but I think what it has done is it has highlighted the uncertainty not only here in the U.K. about the future of the E.U., because the euro has also taken a bit of a hit, but also in the global economy as a whole," he said.