The pound fell sharply against the dollar Monday after the announcement Sunday by popular London Mayor Boris Johnson that he would defy Prime Minister David Cameron and campaign for the U.K. to exit the European Union. 

At 9 a.m. EST, the pound fell 2.3 percent to $1.4073, the sharpest one-day fall in seven years, according to Financial Times, and the lowest the pound has been since March 2009. The FTSE 100 index of British stocks rose 1.25 percent. 

Traders are concerned that the British exit, or Brexit, from the EU could deliver an economic shock to the U.K. Goldman Sachs estimated that the pound could fall 20 percent if the campaign to free the U.K. from the European bloc succeeded. Ratings agency Moody's said Monday: “The economic costs of a decision to leave the EU would outweigh the economic benefits,” pointing to a “prolonged period of uncertainty” that could result. 

The campaign to break off from the rest of Europe has ignited a political firestorm in the U.K., dividing lawmakers and prompting Cameron to mount a defense of continued membership in the EU. Cameron has cited security as a potential risk in leaving the EU, deriding Brexit supporters as nursing an "illusion of sovereignty."

Johnson, in a lengthy column for the Telegraph, said the EU project "has morphed and grown in such a way as to be unrecognizable," curtailing the British independence and threatening "fundamental rights."

As of Friday, some 54 percent of the British public favored remaining in the EU, according to a composite of polls maintained by the Telegraph. A popular referendum scheduled for June 23 will decide whether the U.K. will remain a member.