‘Profound uncertainty’ surrounding Britain's future begins to worry Irish exporters

The uncertainty surrounding Britain’s future is worrying Irish business who export to the UK, Taoiseach Enda Kenny said. He was going into battle with his fellow EU leaders to have Britain remain in the EU.

But he acknowledged yesterday there were major sticking points, specifically concerning the ambition for an “ever closer union”, and whether non-euro countries could trigger a discussion on issues that affected only the euro member states.

Concerns over Britain’s exit from the EU will weigh on UK financial markets for months to come, regardless of the outcome of this week’s EU summit, major bond market investor Pimco said yesterday.

Pacific Investment Management Co, whose flagship fund alone manages $90 billion (€80.7bn) in assets, said it saw a 40% chance of ‘Brexit’ at a referendum planned for later this year.

Sterling traders’ expectations for price swings against the euro in the next six months are at the highest level since the currency bloc’s debt crisis in 2011, as UK Prime Minister David Cameron seeks a deal on the terms of Britain’s membership of the EU.

Sterling advanced as leaders met for the talks at which Mr Cameron wants concessions to address British concerns about its relationship with the bloc, so that he can call his promised referendum for June 23.

That would give those in favour of an unprecedented British exit from the EU the shortest possible time to campaign.

With traders pushing back bets on the timing of a Bank of England rate-increase, and UK economic data painting a mixed picture of the recovery, concerns that Britain may exit the EU are compounding sterling’s woes.

“We’re in a situation of profound uncertainty,” said Neil Mellor, a currency strategist at Bank of New York Mellon in London.

“The big thing from a currency standpoint is that nobody knows what it will mean. They don’t really know what it will mean for relations with the EU, they don’t know if they can trust the polls.

"There’s just one big question mark hanging over the market when it comes to the UK outlook,” he said.

Who owns the power at the summit on #Brexit and #migration — and who doesn't https://t.co/9OEyXRxrK2 pic.twitter.com/WKrolscyQc

— POLITICOEurope (@POLITICOEurope) February 17, 2016