FXStreet (Mumbai) - The referendum to decide whether or not UK will continue to remain a member of the European Union is scheduled to take place before the end of 2017. A bill on referendum has already been passed by the British Parliament. The term Brexit has been coined in this context and stands for UK’s withdrawal from the union. People who favour Brexit believe UK’s exit from the EU will enable to control immigration in a better fashion and also negotiate its own terms of trade without having to accommodate interests of the other countries of the union. On the other hand those who oppose UK’s exit feels that such a step would only reduce the country’s influence in world affairs and also create trade barriers between the UK and the EU When the Conservative Party came to power post the May 2015 general election, David Cameron reiterated his Party's commitment to hold an "In-Out" referendum on UK membership of the European Union by the end of 2017. He however stressed that he would try and negotiate a new settlement for Britain in the EU. More than 100 leading thinkers who participated in FT’s annual poll did not think a vote for Brexit would raise UK’s growth in 2016. Economists think a vote to leave would give rise to uncertainty which would in the process hinder companies from investing in UK. Business confidence and investments will suffer. Growth will thus be affected on capital crunch and dip in consumer confidence. Sterling will also be hurt. Don Smith, deputy chief investment officer at Brown Shipley added “The uncertainty generated by a decision to leave the EU would undoubtedly be damaging for sterling assets across the board and, indeed, the value of sterling on foreign exchanges. Ricardo Reis, professor of economics at London School of Economics, warned that leaving the union “would also open the way for a whole list of dreadful policies regarding trade, immigration, and industrial policy that membership in the EU now precludes”. In a latest development, Prime Minister David Cameron yesterday decided to allow his ministers to campaign either for or against Britain's membership in the EU at a planned referendum. Cameron told the House of Commons "There will be a clear government position but it will be open to individual ministers to take a different personal position while remaining part of the government”. This essentially means, The PM will not sack ministers who campaign in favour of Brexit for not adhering to the collective cabinet responsibility convention. Cameron’s cabinet has large number of eurosceptics who can now conveniently campaign in favour of Brexit. Nigel Farage, leader of the eurosceptic UKIP feels Cameron had done "the right thing". Cameron’s this decision has drawn criticism from several quarters. Main opposition Labour leader Jeremy Corbyn feels giving ministers the freedom to campaign against Brexit would make Britain a laughing stock. Liberal Democrat leader Tim Farron went a step further to add "The prime minister is failing to lead his own government, let alone the country, putting his own internal party strife above what's best for Britain." Kenneth Clarke, a Conservative former finance minister and senior pro-European also criticised the decision mentioning the PM is likely to face a "very difficult task" to "avoid splitting the party". Political pundits however feel that Cameron had little choice in this. Cameron who will be traveling to Germany and Hungary beginning today to renegotiate Britain's EU membership, stressed that he will campaign to stay in the European Union if he achieves to get support for reforms that he wants. Whether a deal on Britain's renegotiation of its ties with Brussels can be reached next month is yet to be seen. It must be remembered here that there are disagreements with respect to Cameron's demands to limit benefit payments only to EU migrants. Opinion polls show British public is has a balanced stance on whether to leave the EU or stay in. In recent months there has however been a slight move towards leaving the union. When Cameron said "Come what may I will continue to lead the government in the way I have,” he probably hinted that even if the in-or-out vote goes against the government recommendations he will not resign. For more information, read our latest forex news.