It is often said, with some justification, that the one thing markets dislike most is uncertainty. Whilst all of the mainstream UK political parties want the nation to continue to be a member of the European Union, there must be a chance that the people will be unimpressed with whatever deal Prime Minister David Cameron can conjure up with Brussels and will vote to leave the EU. Given that Euro-bashing is second only to football in the media as a national sport, many citizens are convinced that all of the UK’s ills would be cured by leaving the EU. Having pandered to popular opinion and to the Eurosceptic elements in the Conservative party and promised an “in/out” referendum by the end of 2017, the PM and the pro-European elements of the British political establishment will have to convince the public that sufficient concessions (totally unspecified at this stage) have been won from the EC and Britain’s European partners that they should vote for the status quo.

Nothing (much) in the modern world happens in a vacuum. Whilst only the British will have a say over their future in the EU, the uncertainty over that decision will affect many things, not least of which is inward investment. Organisations considering setting up a base in the UK may defer that decision until it is clear if such a headquarters would enjoy direct access to the single European market or not. Financial houses based in London may be happy to deal with a nation not in the Eurozone, but the desirability of continuing to be based there if the UK were to leave the EU may be less palatable.

In recognising these facts, ratings agency Standard and Poor’s has changed its outlook on the UK’s economic future from stable to negative. This means that the nation’s credit rating might be downgraded in the next few years, but it stays unchanged at the moment (which S&P rates as AAA). In an explanatory statement, S&P noted: “We believe a possible UK departure from the EU also raises questions about the financing of the UK's large twin deficits and its high private short-term external debt. It is also our view that the calling of a referendum on EU membership indicates that economic policymaking could be at risk of being more exposed to party politics than we had previously anticipated.”

It is likely that other ratings agencies will follow suit sooner or later.