Petrol prices probably aren’t the first thing that spring to mind when you consider your vote on the forthcoming “in/out” referendum on Britain’s membership of the EU.
However, as I briefly mentioned in a previous article, some experts are making some rather grim predictions regarding what could happen in the event of an “out” vote.
These predictions are generally related to an anticipated fall in the value of Sterling. As oil is traded in Dollars, a Sterling drop makes fuel more expensive for Britain.
Although some of the predictions doing the rounds seem like serious doom and gloom, uncertainty around a potential “Brexit” has already had a surprisingly dramatic effect on the value of Sterling. Over the past couple of days, Sterling has fallen to its lowest value against the US Dollar since March 2009, according to a This is Money report. HSBC has predicted that things could get dramatically worse in the event of a “Brexit,” forecasting a potential 20% drop in Sterling’s value. It’s fair to say that the drop that’s already happened will probably put some upward pressure on prices, but if HSBC is correct, a vote to leave the EU could take this to a whole new level.
Petrol Prices: Brexit Predictions
Here are a few quotes and predictions on the subject of what “Brexit” could mean for petrol prices.
“Any signs of what it will be like if we “Brexit” will be capitalised on by the “stay” camp as it will add to the fear factor. I think Sterling will continue to be volatile all the way to June 26th and we will see petrol prices nudge upwards as a result.” Jason Lloyd, CEO here at PetrolPrices.com.
“Financial reports suggest leaving the EU could lead to a sharp fall in the value of the pound which in turn could hit pump prices within days.” Edmund King, AA President.
“The impact on fuel prices of Britain exiting is not likely to be as dramatic as motorists might be led to think.” Simon Williams, RAC Spokesman.
As always, there’s no firm consensus! However, the past couple of days seem to suggest that some price increases are almost inevitable while uncertainty reigns.