City sage says there is 'absolutely no way' the UK will leave the EU

One of the City’s best known investors has brushed off the idea that the UK will separate itself from the European Union, saying there is “no way” that British voters would accept the risks that come with Brexit.

“There’s just absolutely no way that the UK is leaving Europe. It’s that simple,” said Richard Buxton, the chief executive and head of equities at Old Mutual Global Investors. “As in the Scottish referendum, the markets are much smarter than the pollsters. Watch the bookies, not the pollsters.”

The most recent odds from Ladbrokes suggest that continued EU membership is more likely than Brexit, with odds of 8/15 offered on a vote to remain, and 6/4 on a vote to leave.

Mr Buxton's comments on the EU were echoed by Mark Wood, the former boss of Prudential, who suggested that the depth of the UK’s links to the Continent made the idea of complete withdrawal almost meaningless. “If we were to come out of the EU it would be a decade’s work,” he said at a financial services panel debate organised by the accountancy firm EY.

Meanwhile, the boss of the investment house Schroders has taken a more sanguine view of Brexit, although he also sees only a remote chance of a vote to leave.

“As far as Brexit is concerned, I wait to see what is on the table when the referendum comes round. Both polarised Eurosceptics and Europhiles use to emotional language about a decision which should be made on facts and good information,” he said in an interview with the writer Alain Elkann.

“I think it unlikely we will vote to leave. If we do, we will reach an accommodation with the EU after a couple of years, one that works for both sides. Talk of economic suicide or catastrophe is very wide of the mark.”

However, the Central Bank of Ireland has flagged up the potential damage to the UK’s neighbour if it decides to separate from the continent, in its first analysis of what a vote to leave would mean.

“Analysis undertaken in the Central Bank suggests that Brexit would have a negative impact on exports, GDP and labour market developments in Ireland under a number of different scenarios considered,” said in the bank in its bi-annual financial review.

The institution said Ireland's five retail banks have about 21pc of their total assets, or €64bn, tied up in the UK economy, primarily in property. The insurance sector is also heavily reliant on ties to Britain, leaving it vulnerable to an economic slowdown or major legal changes in the wake of a break from the EU.

The central bank concedes that there could be a silver lining for Dublin's financial centre if large companies decide to relocate from a post-Brexit UK.

The Government has pledged to hold a referendum on whether to remain part of the EU before the end of 2017. David Cameron continues to lobby European institutions to try and secure a package of reforms ahead of the vote, although hopes are fading for concrete progress on the renegotiations this year.

The opinion polls of both politicians and the public suggest that opinions are split. A recent study by Open Europe found that the majority of Tory MPs are still undecided about whether the benefits outweigh the costs of EU membership. Meanwhile, a poll of party members by Conservative Home last month produced a 71pc vote to leave.