British Drift to EU Exit Spooks Investors as Voters Tune Out

[Purveyor]

by Matthew CampbellSvenja O'Donnell

(Bloomberg) -- As U.K. voters make up their minds before an election on May 7, the issue that matters to financial markets is one that’s barely troubling them.

Opinion polls show that a referendum on leaving the European Union, a signature policy of the governing Conservative Party, is way down the priority list of an electorate more concerned about health care, immigration and sustaining a nascent economic recovery. Executives and investors say the prospect of an EU exit would hit confidence in stocks, bonds and the pound as well as push some companies to freeze spending.

“A referendum opens up uncertainty about the future of the U.K. economy and its relationship with Europe, which is potentially de-stabilizing for investment,” John Stopford, head of fixed income at Investec Asset Management in London, said in an interview on Wednesday. “Markets don’t like uncertain outcomes, and it would mean quite a lot of uncertainty.”

Whether the U.K. opens the possibility of leaving the EU after more than four decades will be decided by the narrowest of margins and would reflect the country’s often ambivalent relationship with its European partners.

Pound Volatility

Prime Minister David Cameron’s Conservatives and the opposition Labour Party are neck and neck in most polls. The makeup of the next government will likely depend on negotiations with smaller parties, including the Scottish nationalists who want to remain in the EU though leave the U.K.

more...

http://www.bloomberg.com/news/articles/2015-03-06/british-drift-to-eu-exit-spooks-investors-as-voters-switch-off

[muriel_volestrangler]

1. Bloomberg only gives half of the poll results, though

In its latest poll of political priorities, YouGov Plc found just 10 percent of voters believed the relationship with Europe is among as many as three “most important issues facing you and your family.” That compared with 43 percent who chose the economy, 38 percent who cited health, and 29 percent who selected pensions in the survey conducted March 2-3. The numbers were little changed from a poll in February.

Immigration, an issue that partially overlaps with EU membership because most citizens of the 28-member bloc can move freely within it, was chosen by 20 percent of respondents.

That's true; but the poll also asked for up to 3 "most important issues facing the country at this time"; in that, immigration was chosen by 50% - the highest of all - and Europe by 17%, putting it fifth (it was tenth for 'you and your family'). You then have to work out how much people vote 'for the country', and how much 'for themselves and their family'.

(Among the parties they intend to vote for, there is a huge difference - 90% of UKIP voters put immigration as a top 3 concerns, and only 29% of Lib Dems).