19th February 2016
The number of investors preparing to vote to leave Europe has increased by half since last summer.
Research by The Share Centre shows 63% of investors would leave the EU, up from 44% in August.
Although prime minister David Cameron has been meeting with EU leaders in Brussels to work out a compromise deal, 76% of investors do not believe the proposed reforms would materially change the UK’s relationship with the EU.
In 2013, Cameron set out his objective of achieving ‘fundamental and far-reaching change’ in the EU and the UK’s relationship with it. However, the figures show that the package of reforms is falling short of investors’ expectations.
When asked whether Cameron had been successful in obtaining concession for the UK, 72% of investors said ‘no’.
The issues concerning investors centre around financial services regulation and immigration.
Seven in 10 investors believe the origination of financial services regulation should come back to the UK and 52% said recent immigration issues in the EU has made them more likely to vote to leave.
When asked what the main factor influencing their voting decision, most investors ranked sovereignty (32%), EU regulation (28%), economic issues (23%), ahead of immigration at 17%.
Economic issues are clearly important to investors and one in five said recent global economic volatility had made them more likely to vote to leave, compared to one in 10 who said it made them more likely to vote to stay.
Half of people said they were concerned about the impact the vote would have on stockmarkets.
The number of people who think an exit will have a negative impact on the stockmarket has fallen from 63% in August to 58% and the number of people who believe it will have a positive affect has risen from 44% to 60% over the same period.
Over a third of investors have changed their investment behaviour, or plan to do so, ahead of the referendum.
Richard Stone, chief executive of The Share Centre, said: ‘When we asked investors for their views on the EU referendum question in August 2015, ahead of the renegotiations, a majority said they would vote to stay in.
‘Most respondents felt a vote to leave would have negative impacts on the UK and the stockmarket, and many were optimistic about David Cameron’s prospects for negotiating meaningful changes to the UK’s relationship with the EU. Now the draft reform proposals have been published there has been a dramatic shift in opinion in favour of exiting.’
He added that a ‘significant majority of investors now believe a vote to leave would be positive for the UK as a whole’.
‘Recent market and global economic volatility has made investors more likely to vote to leave and lessened fears over the impact of a vote to leave on the market – indeed, the responses could be interpreted as suggesting investors believe the UK would be better positioned to weather such storms outside of the EU,’ he said.
‘Concerns about the potential impact on stockmarkets have lessened but persist, however, there is no doubt that this group of voters – an important part of the UK electorate – are strongly supporting an exit.’