Britain entered the final day of campaigning before its referendum on European Union membership with opinion polls and financial markets at odds over the outcome.
Investors are piling money into bets on a victory for the “Remain” campaign, led by Prime Minister David Cameron. The pound has surged to a five-month high and European stocks just posted their biggest three-day gain in almost a year, with the UK’s benchmark index erasing its monthly decline. Bookmakers have shortened their odds on a vote to stay.
Polls, meanwhile, say the race is too close to call after a swing toward the “Leave” campaign came to an apparent halt last week following the murder of Labour Party lawmaker Jo Cox, a supporter of staying in the EU.
“Rising anticipation that ‘Remain’ will win the vote is driving the market,” said John Plassard, a senior equity-sales trader at Mirabaud Securities in Geneva. “Even if polls are close, people are paying more attention to the bookmakers because that was a much better predictor in past referendums.”
The British currency is already trading at levels economists forecast it would reach after a decision to stay in the EU. Sterling was up 0.2% at $1.4679 as of noon in London. The median estimate in a Bloomberg poll of economists earlier this month was for it to trade in a range of $1.45 to $1.50 the day after a “Remain” victory.
European equities, which tumbled last week, jumped 5.8% in the past three days, the most since August. Britain’s FTSE 100 Index has rebounded 5.4% from its low and has erased its monthly loss. And an index of betting flows compiled by Odds checker shows the chance of Brexit has fallen to about 25% from 43% since June 14.
Less than 24 hours before voting booths open today, both sides of the campaign were still assuming there’s all to play for, and making emotional appeals to the electorate. A record number of Britons, 46.5mn, have registered to vote, according to the Electoral Commission.
The domestic stakes are high. Scotland’s Parliament should have the right to propose another referendum on independence if it “faces the prospect of being taken out of Europe effectively against our will,” Scottish National Party leader Nicola Sturgeon said on Bloomberg Television yesterday. Polls show Scots are generally more pro-EU than the far more numerous English. With different polls putting each side ahead, the BBC held a debate on Tuesday evening at Wembley Arena in London before a raucous audience of 6,000. The fiercest arguments were within the governing Conservative Party. Both former London Mayor Boris Johnson and Energy Minister Andrea Leadsom, arguing for “Leave,” were confronted by the leader of the party in Scotland, Ruth Davidson.
“You are being asked to make a decision that is irreversible, we can’t change, we wake up on Friday and we don’t like it and we are being sold it on a lie,” Davidson said. “They lied about the cost of Europe, they lied about Turkey’s entrance to Europe,” she told the audience. “You deserve the truth.”
Johnson urged the nation to make Thursday “our country’s independence day.”
“They say we can’t do it,” he said. “We say we can. They say we have no choice but to bow down to Brussels. We say they are woefully underestimating this country.”
The intra-Conservative discord highlighted the challenges Cameron faces uniting his party even if “Remain” wins. Sayeeda Warsi, a former chairman of the party, this week accused Justice Secretary Michael Gove of propagating “lies” about the EU, the latest in a string of increasingly personal attacks exchanged by senior Tories during the campaign.
The “Leave” camp had one key message in the TV debate - “take back control” - and hammered it home repeatedly. “I’m passionately a believer in immigration, but it’s got to be controlled,” Johnson said.
The “Remain” side focused its fire on Johnson. His successor as mayor of the multicultural capital, Labour’s Sadiq Khan, accused him of running “Project Hate” over immigration.
Cameron said yesterday’s edition of the Financial Times that the race was “very close - nobody knows what’s going to happen.”
The “Remain” campaign is emphasising its message of the economic risks of a Brexit in the final stretch. Yesterday’s Times newspaper published a letter from 1,285 leaders of businesses employing 1.75mn people, saying that “Britain leaving the EU would mean uncertainty for our firms, less trade with Europe and fewer jobs.” Among the signatories was Michael Bloomberg, founder and majority owner of Bloomberg LP, the parent company of Bloomberg News.
“Leave” supporters are trying to discredit claims that departing the EU will lead to economic pain. Leadsom said yesterday that predictions of recession are based on a “ludicrous forecast” of the UK’s ability to negotiate trade deals on its own. Pages 3, 14, 15