The tragic death of pro-European Union (EU) politician Jo Cox has shocked the U.K. and could sway public opinion towards the safety of a unified economic bloc, analysts say.
Cox was stabbed and shot on Thursday in an attack that halted campaigning over whether the U.K. should leave the EU. Police said they arrested a 52-year-old man, but did not know of a motive for the killing.
Numerous media reports cited witnesses who claimed the assailant shouted "Britain first," a factor potentially linking Cox's murder to the June 23 vote, although the alleged comments are yet to be verified. Britain First, an anti-immigration right wing group which backs Brexit, distanced itself from the incident.
The attack comes amid heightened global security fears following numerous terrorist attacks in the U.S. and Europe, including Sunday's attack at a Florida nightclub that left 49 dead.
"It [Cox's murder] may change the psychology of the campaign. Those who are pro-EU may benefit from this tragic event...it could boost their chances," said Fariborz Moshirian, director of the Institute of Global Finance at the University of New South Wales.
Markets seemed to believe that too. The pound was half a percent higher at around $1.4273 in early Friday trade, a sharp turnaround from its two-month low of $1.4013 hit earlier this week, The recovery of riskier assets, including the sterling's rally, was due to the perception of a higher probability of a Remain vote, said Alan Ruskin, global co-head of FX research at Deutsche Bank.
The fear of a Leave vote saw the currency fall in recent sessions amid fears over the potential economic damage Britain would endure in that scenario.