Thirty-nine percent of respondents picked these as their second-biggest risks.
The EU vote could come as soon as mid-2016 and by the end of 2017 at the latest - Prime Minister David Cameron has yet to fix a date. An exit would have repercussions for the pound and gilts, and would also trigger negotiations on all manner of economic and other agreements, leaving foreign companies to question the wisdom of investing in the U.K.
“The risk for 2016 is purely around the sentiment for investors,” said Azad Zangana, an economist at Schroders Investment Management in London, which has $436 billion under management. “Foreign-direct investment may be held back until there’s more clarity around the U.K.’s relationship to the EU.” [...]
“We don’t know what the new deal that Cameron is going to get will look like,” said Dan Hanson, a Bloomberg Intelligence analyst and former economic adviser to the Treasury. “An even bigger unknown is that if we were to vote to leave, we don’t know anything about how we will renegotiate trade deals with different countries.”
Voter opinion polls have been inconclusive. Two telephone polls last week showed leads of 21 and 17 percentage points for staying in the European Union, while two online surveys showed the stay camp running neck-and-neck with the leave campaigners.
Shifts in these surveys as the vote draws closer may roil markets, as they did before the referendum on Scottish independence last year. The pound had its worst day of 2014 on Sept. 8 after a poll unexpectedly showed voters favoring a breakup of the U.K. [...]
“The Brexit issue will come center stage in 2016 and the whole buildup and eventual vote have the potential to unnerve investors and impact negatively on the U.K. economy,” said Alan McQuaid at Merrion Capital. Leaving aside that, and risks from terrorism, “you could pick a number of issues.”
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