Cameron's first 100 days

"The question," Whyte says, "is whether this is the calm before the storm". Two ominous-looking clouds are gathering on the horizon: financial regulation and the EU budget... London is the largest financial centre in Europe. So ministers face a "difficult balancing act", according to Whyte, in which they want to clamp down on banks while avoiding damaging London's competitiveness. The hedge funds directive was a case in point. Then, Osborne accepted defeat. It may not always end the same way. Whyte warns: "If the British government believes the EU is not taking account of British sensitivities then we do have the potential for big blow-ups." The second threat is that of the EU budget, which begins a new seven-year cycle in 2013. Negotiations towards this date are already taking place - and the UK's position is becoming "increasingly unsustainable". Whyte fears reforms of the increasingly watered-down common agricultural policy are undermining Britain's arguments.