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10 Feb 2016
UK referendum: Could EU migration politics delay an ‘in/out’ vote? – SocGen
Research Team at Societe Generale, suggests that the support of all EU countries is crucial for Britain to obtain approval at the Summit next week for the proposed reforms, including those related to in-work benefits and an emergency brake on immigration.
Key Quotes
“Convincing the UK public to vote to stay in the EU will still be a daunting proposition and could cause PM Cameron to dither over calling a June vote if Brexit polls do not swing back in favour of staying in the EU. Failure by the EU to secure its borders in Greece before another refugee influx and a new proposal by the European Commission in March to spread the cost burden of immigration more evenly could result in a backlash against the government’s pro-EU campaign.
The wild fluctuations in financial markets have kept implied GBP volatility bid and catapulted EUR/GBP back above 0.7800 into the 0.7765-0.8066 range of September-December 2014. An ascent towards 0.8190 cannot be ruled out when 0.8000 gives way. The gilt and OIS curves are now pricing in the next move in UK Bank rate lower, not higher.”
Key Quotes
“Convincing the UK public to vote to stay in the EU will still be a daunting proposition and could cause PM Cameron to dither over calling a June vote if Brexit polls do not swing back in favour of staying in the EU. Failure by the EU to secure its borders in Greece before another refugee influx and a new proposal by the European Commission in March to spread the cost burden of immigration more evenly could result in a backlash against the government’s pro-EU campaign.
The wild fluctuations in financial markets have kept implied GBP volatility bid and catapulted EUR/GBP back above 0.7800 into the 0.7765-0.8066 range of September-December 2014. An ascent towards 0.8190 cannot be ruled out when 0.8000 gives way. The gilt and OIS curves are now pricing in the next move in UK Bank rate lower, not higher.”