>> Sterling and global stocks are taking a bit of a breather after a huge drought in the wake of Britain's EU referendum. I'm Swaha Pattanaik for Reuters' Breaking Views in Canary Wharf. We've had a bit of a stabilization in sterling today, and global stocks are not suffering another sell off, which is already good news.
That's not much in the way of the banks however, given the sort of rout we've seen over the last two, three trading days. We've had something like 3 trillion wiped off global stock markets and it's already one of the worst losses in history. Sterling has had it's biggest drop against the dollar in its history as well, so we're beating lots and lots of records, unfortunately.
We've stabilized a little bit after sterling hit something like a lowest level since 1985 against the dollar. The banks, however, has pretty limited scope to go. One of the things we're seeing is concern that a recession may be coming down the track. That will have to show up in the figures probably before we get another mark slide.
More indicators that go in that direction will keep driving sterling down. Another problem is huge political uncertainty. The ruling conservatives are looking for the leader to replace Prime Minister David Cameron, the opposition party is also in disarray. The other problem we have is Britain's current account deficit, which is the biggest in the developed world.
That means Britain needs to keep attracting foreign investors into this country to be able to cover that deficit. This looks less and less likely at a time of huge economic uncertainty, huge political chaos, and a big question mark over what exactly relations will be with the European Union.