Could Brexit Spark a Recession?

The UK is set to make a crucial decision on June 23rd, considering factors beyond monetary and financial stability. The MPC identifies the referendum as a major risk, with potential economic impacts if the UK leaves the EU. This could affect exchange rates, demand, and investment, and tighten global financial conditions. The sterling has already fallen by 9% since November 2015, partly due to referendum concerns. A further decline in sterling could increase inflation, influenced by trade terms, productivity, and risk premiums.

In what ways could the recent behavior of foreign exchange markets impact the UK's economic projections?

What factors are mentioned as driving the sterling exchange rate?