just a couple of months ago investors
felt neutral about political risk the
Paris attacks and the shooting down of a
Russian jet over Turkish airspace had
little impact on the market it feels
different now frazzled markets feed
political risk the smell of market fear
is amplifying every danger out there
Trump Syria Iran tensions Isis migrant
crisis far-right election success that's
why sterling is under attack with
astonishing rapidity brexit has shot up
the worry scale of investors the issue
is all over the analyst community UBS
notes a spike in brexit mentions on
Google since the start of 2016 but I
investors brexit fixated just because EU
referendum year has probably arrived
what the pound is down six point four
percent in the last three months but the
pace of the decline has quickened
because the new year has seen the market
turn nasty sterling is in investor sites
because market anxiety is turning them
away from anything deemed risky the
price of UK credit for swaps has shot up
since Jeremy the first right now brexit
makes the UK feel like a risky asset now
that was far from the markets view last
year as the pound drove on towards one
dollar sixty and the Bank of England
turned hawkish on rates now maybe better
reasons why sterling should fall the
dominant issue of the UK's current
account deficit which is coming in at
around four point five percent of GDP is
one the bank of england's new dovish
tone is another but political risk is
the flavor of this sour month when it
comes to bashing the pound it's wilting
even before David Cameron has set a
referendum date sterling came under some
pressure ahead of the 2014 Scottish
referendum and the 2015 general election
as we see here there's the Scottish
referendum impact and there is the
election impact but the decline and the
fall is nothing as big as it is at the
moment and certainly never this early
market turmoil is the reason for its
decline not the prospect of the UK
leaving the EU
here as though that maybe if some market
normality is restored that maced not
stop there pound weakening further but
it may put brexit and Sterling's real
value in a better context and make
investors a bit more sanguine about
political risk