The British pound fell sharply Monday after London’s popular mayor, Boris Johnson, became the most prominent politician to say he would back the campaign for Britain to leave the European Union in a June 23 referendum.

The announcement on Sunday dealt a blow to U.K. Prime Minister David Cameron in his bid to persuade voters that they would be better off staying in the bloc. Mr. Johnson is a fellow Conservative politician and is regarded as a contender one day to succeed Mr. Cameron.

Mr. Johnson joins a large group of lawmakers from the ruling Conservative party that have said they will campaign to leave the EU, including five senior ministers.

The pound was down 1.5% against the U.S. dollar at $1.4187 in early London trade and was down 1.1% against the euro at €1.2799.

Meanwhile, the yield on 10-year U.K. government bonds rose around 0.03 percentage point to 1.433% as prices fell, according to Tradeweb.  The U.K.’s FTSE 100 index shrugged off the news, rising 1.2% amid a bounce in commodity prices.

Traders have been ramping up bets against the pound ahead of the referendum announcement. The pound is off 3.8% against the dollar this year and 5.7% against the euro.

Last week, the cost of buying options contracts to protect against a big move in the pound this summer hit its most extreme level by one measure since Europe’s sovereign debt crisis.