New indicators suggest the prospect of Britain opting to leave the EU is becoming more of a reality.
In its latest global economic outlook, French financial services giant, Societe Generale has estimated a 45% risk of so-called ‘Brexit’ occurring.
If that does happen, Societe Generale has forecast the British economy could see at least a decade of stunted economic growth, with between 0.5% and 1% of annual GDP increases wiped out every year until 2026 at the earliest.
“There is a high risk that the UK could vote to leave the European Union, with significant economic damages resulting from such a risk scenario,” the bank said.
“Whatever the outcome, the result of the subsequent referendum is still too close to call. Currently the ‘out’ camp is making all the running,” it added.
In its latest outlook, Societe Generale said only half of UK prime minister, David Cameron’s four-point plan for an improved relationship between Britain and the EU is achievable; with the issue of sovereignty “nebulous” and immigration (preventing immigrants claiming benefits for four years) “the real sticking point”.
Meanwhile, a survey by accountancy giant Deloitte has shown that support amongst big UK businesses for Britain remaining in the EU has shrunk since the halfway point of 2015.
While most finance chiefs still favour maintaining membership, that majority now stands at 62% as opposed to 74% the last time Deloitte checked at the end of last June.
While Deloitte’s chief executive, David Sproul, noted a clear majority of chief financial officers within Britain’s biggest businesses still favour the UK being part of the EU, “the proportion of those expressing unqualified support has fallen.
This mirrors what we have seen from the broader public in opinion polls in the last six months,” he said.
A recent public survey of British citizens showed nearly half of them are now leaning towards a vote for the country to leave the EU.
With regard to the knock-on effect for Ireland, economic think-tank the ESRI recently said ‘Brexit’ could reduce bilateral trade flows between Ireland and Britain by at least 20% over the long term; while the Dublin-based Institute of International and Economic Affairs (IIEA) said a UK exit from the EU could wipe €6bn off the annual value of Irish exports.
Paddy Power is currently offering odds of 2/5 for Britain to remain in the EU; slightly widened from 1/2 only a month ago; and 7/4 for an exit.
In terms of a date for the actual vote, the company is offering odds of 2/7 for it to take place this year; 5/2 for a 2017 vote and 25/1 for it to be mothballed until 2018.
As well as Societe Generale, other surveys — by the likes of Mori and ICM— show 41% support for leaving the EU and 42% for remaining.
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