UKIP’s victory in the Clacton by-election shows the party’s popularity is surging. Political analysts are forecasting UKIP could secure over 100 MP’s in the May 2015 general election and hold the balance of power at Westminster. Nigel Farage confirmed UKIP intends to form a coalition with the Conservatives if the Tories agree to an immediate referendum on the EU.

The uncertainty caused by a possible referendum will increase as the election draws closer. Sterling is likely to come under pressure and businesses may defer investment decisions on a broader scale than seen in the Scottish referendum.