A STERLING crisis would be a "serious possibility" in the event of a UK exit from the European Union, a top fund manager has warned.

James Anderson, who manages the £3.7 billion Scottish Mortgage Investment Trust, highlighted his worries that people might lose confidence in the UK economy if there were to be a vote to leave the EU in the referendum promised by Prime Minister David Cameron by 2017.

Highlighting his belief that the pound could be hit, Mr Anderson said: "I think, at some point, there is a serious possibility...in the context of a British exit of a sterling crisis...that people lose confidence in the fundamentals of the economy."

In this context, he cited "everything from" the trade deficit and weak productivity to low investment.

Asked about his assessment of the probability of a UK exit from the EU, Mr Anderson replied: "I would have thought it is something like one-in-three to one-in-four. I don't think it is the likely outcome but I think it is quite possible."

Mr Anderson voiced his opinion that the chances of the UK exiting the EU had decreased in the last 12 months.

He said: "I think they probably have (decreased) in the sense that I think the power of the populist xenophobic fringes has probably got a bit less to influence the debate."

While emphasising the EU membership question was "not central to the way we go about investing" at Scottish Mortgage, Mr Anderson added: "It is a major issue."

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