The latest set of polls show that it is too close to call whether Britain would leave the European Union if a referendum was called today.
An ICM poll and Survation poll released last night, cited by the MEP Daniel Hannan, show that Britain is walking on a tightrope when it comes to staying within the 28 member bloc.
The ICM shows that 42% of people would vote to remain in the EU, which is 1 point less than before, and 42% would vote to leave, which has gained 2 points.The Survation poll shows that 40% would choose to remain, down 2 points, while 42% would vote to leave, which is a gain of 2 points.
This falls neatly in line with a research note Robert Wood and his team at Bank of America Merrill Lynch released yesterday saying that polls are too close to call right now and uncertainty could hurt Britain’s growth because investors are unsure whether the country will end up leaving in less than two years time:
Prime Minister David Cameron promised Britons that his government would push for a “better deal” with the EU, which includes renegotiating immigration rules for people coming to the UK, ahead of the 2017 referendum.
Various polls over the last year have shown how the Freedom of Movement Act, which allows all EU citizens to easily migrate to any other member state, as well as immigration in general is one of the factors that pushes UK voters to pip for exiting the bloc.
However, at the beginning of this month European Council President Donald Tusk said that while there is a “strong will” among EU states to renegotiate the terms of Britain’s membership, there was absolutely no consensus over the UK having stricter immigration rules compared to other EU counterparts.
“Our goal is to find solutions that will meet the expectations of the British prime minister, while cementing the foundations on which the EU is based,” said Tusk in the letter, cited by Reuters.
“Uncertainty about the future of the UK in the European Union is a destabilising factor. That is why we must find a way to answer the British concerns as quickly as possible.”
Wood and his team at BAML highlighted how this is actually a huge deal for how people will vote because the results of the renegotiation could dramatically tip the final result:
But BAML warned that Cameron’s pursuit in renegotiating Britain’s membership conditions with the EU are not going well and this could have a serious effect on how people will vote:
Prime Minister Cameron last month set out the aims of his renegotiation of the terms of the UK’s EU membership. He wants to complete that renegotiation before holding the referendum. The plan seems to be to show with the renegotiations that UK public concerns about the EU have been partially resolved (or not, as the case may be). The negotiations do not seem to be proceeding smoothly. This is important.
The UK’s forthcoming referendum on whether to remain in or leave the EU (Brexit) is, to our minds, the biggest risk to the UK economy in 2016. We have previously argued that the economic fall-out from an exit would be very serious. The result could reverberate through the European economy as a whole if it encouraged a belief that more countries could split from the EU.
Uncertainty about the referendum outcome could hurt UK growth next year even ahead of the actual vote. We have assumed a 20bp drag but have no way of reliably quantifying the potential effect.