If Britons vote as expected to retain their EU membership card on June 23, then sterling would gain four per cent on the dollar in the immediate aftermath of the referendum, a Reuters poll found yesterday.

However, if the opinion polls and betting firms prove wrong again and Britain decides to walk away from the EU the currency would fall seven per cent, the poll suggested.

Sterling fell to its weakest level in almost two-and-a-half years against a basket of currencies yesterday, as investors showed increasing concern about the outcome of the vote.

“It highlights how vulnerable sterling is to any glimmer of any political moves. It is very vulnerable and pretty volatile – and we still have a couple of months to go before the referendum,” said Jane Foley at Rabobank.

Support for Britain staying in the EU has fallen slightly but maintains the narrowest of leads and bookmakers’ odds still point to a roughly 35 per cent chance of a Brexit, which analysts say is now largely priced into the pound.

Support for Britain staying in the EU has fallen slightly but maintains the narrowest of leads and bookmakers’ odds still point to a roughly 35 per cent chance of a Brexit

Adding to confusion, opinion polls failed spectacularly to predict a Conservative Party victory in Britain’s 2015 parliamentary election, blaming sample recruitment methods and, potentially, unintended herd behaviour by pollsters.

With so much uncertainty abounding, the Swiss franc and Japanese yen may be the biggest gainers from falls in sterling in the run-up to the referendum, options prices suggest.

Sterling has been hit hard this year as investors worry leaving the EU – a Brexit – would threaten the foreign investment flows Britain needs to fund its current account deficit, one of the biggest in the developed world.

A rise in the fourth quarter deficit to a record high put focus on how exposed Britain would be, should those foreign investors and buyers of its bonds be spooked by a Brexit. Like sterling, the economy would be worse off if the country does leave and Britain’s FTSE stock index will not make much, if any, progress for the rest of 2016 due to uncertainty on the vote, recent Reuters polls have showed.

With so much ambiguity around the referendum result, predictions for sterling were in a wide range although median forecasts were revised up a little from last month. One euro will be worth 79 pence in a month’s time, medians in the poll of nearly 60 analysts taken this week suggested.

In six months a euro will get you 75p and in a year 73.5p.

Against the dollar, currently around $1.41, the pound will be trading at $1.42 in a month, $1.43 in three and $1.48 in a year, the poll found. In March the respective forecasts were for $1.40, $1.40 and $1.46.

That is largely based on expectations the US dollar rally has nearly run its course after the Federal Reserve last week took off the table any near-term interest rate hikes.