The probability that the pound will fall if Britain decides to leave the European Union in next week's referendum is growing, the nation's cental bank said Thursday.
"On the evidence of the recent behaviour of the foreign exchange market, it appears increasingly likely that, were the UK to vote to leave the EU, sterling's exchange rate would fall further, perhaps sharply," the Bank of England said on its website.
"The outcome of the referendum continues to be the largestimmediate risk facing UK financial markets, and possibly also global financial markets."
Next week's referendum, which could result in a so-called Brexit, or Britain's exit from the EU, has caused considerable market uncertainty in Europe and around the world.
Recent polls have suggested support for the Leave campaign has moved ahead of support for the Remain camp in the June 23 referendum.
Short-term interest rates have already been influenced by the opinion polls, the Bank of England said in its Thursday statement.
A Brexit could force the government to make severe spending cuts and raise taxes, Chancellor of the Exchequer George Osborne said Wednesday.
Prime Minister David Cameron backed Osborne's claims, saying he expects the pound to fall and the cost of living to rise after a Brexit.