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Brexit would be bad for the UK – Berenberg

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  • 21/11/2014
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The threat of Britain leaving the EU has just increased as a result of last night’s by-election victory for UKIP in Rochester and Strood.

That is the view from Berenberg Bank, which insists that leaving the EU would be bad news for Britain PLC.

Last night’s by-election saw Mark Reckless become UKIP’s second elected MP to Westminster and has shook the political establishment raising the possibility that the party could go on to win a sizeable number of seats at next May’s general election.

Berenberg is concerned that the stronger UKIP become the more Eurosceptic a future Prime Minister will be, increasing the threat of exiting the EU.

The bank insists that such a move would be detrimental to UK trading in the single market and that the costs in lost trade – exports and also the lost investment in the UK would be large. It said that the uncertainty and disruption over Britain’s future in the EU alone is damaging and that the arrangements following an EU exit would be wide-reaching.

Berenbeg said that outside the EU, Britain would lose a lot of influence and be a far less attractive partner for trade deals. It points to the EU’s trading deals with the US and insists that membership is no trading barrier with foreign markets such as China.

The bank said: “When push comes to shove, we expect the UK to
stay in. Support for EU membership is at a 23-year high. Brits seem to dislike taking huge risks at the ballot box. And EU leaders should give the UK just enough concessions to keep it in. But an EU exit would be very costly in our view, so we cannot be complacent about how those risks evolve.”

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