The odds on a Brexit still not clear


A referendum on the UK’s EU membership is scheduled to take place before the end of 2017. Prime Minister David Cameron’s offer to British citizens to hold a referendum on whether to leave the European Union might have seemed like a reasonably safe bet just a few years ago, but we’re not so sure now.

 The idea is that David Cameron wants to get a ‘better deal’ for the British public by holding the vote and renegotiating the terms from the EU.

Few believe he really wants to enter history books as the Prime Minister who took Britain out of Europe and a close reading of his speech shows that he is asking for very little. The outcome is still not clear, with next week’s meeting detailed negotiations will begin in Brussels.

Meanwhile the prime minister will embark on a diplomatic offensive to persuade 27 heads of government of the merits of the British case. This uncertainly is likely to create further volatility in both the FTSE and pound sterling next week; although better unemployment data today should strengthen the case for the PM to negotiate better terms.