The Daily Update - Brexit

Over the weekend the leader of the free world offered his point of view on the Brexit debate. In a joint press conference with Prime Minister David Cameron, the US President did not hold back when responding to claims by the leave campaign that it would be easy to negotiate a trade deal with the US if the UK were to leave. Claiming that the UK would be at the “back of the queue” in any trade deal negotiates Obama added “They are voicing an opinion about what the United States is going to do, I figured you might want to hear from the president of the United States what I think the United States is going to do”.

One of the problems the leave campaign has is that the EU and the US are already in the middle of negotiating the biggest trade deal in history. The Transatlantic Trade and Investment Partnership (TTIP) was planned to be signed by the end of 2014, however some commentators now think this will not happen until 2019 at the earliest. However, according to the European Commission TTIP will boost the EU and US economies by over USD200bln whilst adding USD100bln to the rest of the world. Obama said his view that the UK would be at the back of the queue with regards to any trade deal was not a threat, just his observation saying “This is a decision for the people of the United Kingdom to make. I’m not coming here to fix any votes. I’m not casting a vote myself. I am offering my opinion, and in democracies, everybody should want more information, not less, and you shouldn’t be afraid to hear an argument being made.”

President Obama is not the only one from the United States to warn the UK of the dangers of leaving the EU. In an open letter to the Times newspaper eight former US Treasury Secretaries going back to the Richard Nixon era have warned the UK it should not ‘turn inwards’ and that leaving the EU would be a ‘risky bet’.

In an interview with the BBC last week Lawrence Summers, who was Secretary of the Treasury under the Clinton administration from 1999 said leaving “would be unfortunate for the British economy, unfortunate for Europe, unfortunate for the U.S., and unfortunate for the world,” adding “It would do damage to London as a financial centre, it would do damage to Britain as a gateway to Europe, it would remove the very positive influence that Britain has within European debates that strengthen the European economy. It would be a step toward a more closed, more protectionist, less effective and less prosperous global economy.”

Of course the leave campaign sees this all very differently. Nigel Farage believed Obama’s comments were “utter tosh” saying that he has come to London to threaten the UK with empty claims adding “Who cares what the US wants? It’s what we want that matters,”. He said a trade deal between the US and Australia had been signed within 2 years of negotiations starting. Boris Johnson also attacked Obama, claiming he had a “ancestral dislike” due to the British empire because he was “part-Kenyan president.”

Following the weekend’s events, there has been marked shift in the odds on whether the UK will to vote to leave or not.  The comments from the leading ‘leave’ campaign has served as further evidence of what some people see as a growing disarray within the ‘Leave’ camp and a gradual shift in public opinion, with the remain/leave probabilities indicated on betfair exchange now at 74%/26%.