Uncertainty and Brexit spread doubt in the City

Although they criticize the European Union as it exists today and even more the flaws of a Eurozone that they deem unviable, UK bankers, fund managers and investors do fear a Brexit: the UK exit from the EU. As the elections scheduled on May 7, 2015 come closer, there is growing media coverage of what could be the consequences, mostly negative, of such Brexit. “The likelihood of a referendum I think will put a brake on external investment, international investment in the UK, it will create uncertainty,” £9 billion fund manager Neil Woodford told the BBC. “I am acutely aware that a referendum on Europe will be quite a destabilizing period given that we may not necessarily have a clear outcome on it,” a former fund manager and senior Conservative MP Mark Garnier said at the Open Europe conference.

Except the rightist UKIP, most of the UK politicians say no to the Brexit. Why panic could be spreading is threefold. First, there is a tidal wave of Euroscepticism, especially across France, Spain and Greece, that threatens the very existence of the EU. Besides, that is in part because a large portion of the British people is eurosceptic that UKIP reaps votes. Second, there is growing disconnection between the British public opinion and its political leaders. The more the elites work at preventing a Brexit, the likelier a Brexit gets. Third, whether the City is right or wrong about the Brexit turns out that it is inaudible. Actually, the stronger is the City’s defense of Britain’s EU membership, the more convinced are anti-EU voters that the EU is serving the interests of the City rather than the interests of the people. Creating anxiety or stressing on the negative consequences of a potential Brexit therefore seems quite counterproductive.