Posted on: 14 June 2016
Since Prime Minister David Cameron announced the date for the UK’s EU referendum at the EU Summit on 19 February, Brexit has rarely been out of the headlines. Unbelievably, it was barely two months ago, on 15 April, that campaigning kicked off, with ‘Vote Leave’ being named as the official ‘leave EU’ campaign.
So with a week to go until B-day, which way will the people vote? Betting odds are generally a better gauge of voting temperature than polls and, since campaigning began, have consistently predicted a remain vote. But the odds are slipping. Last week, the probability of the UK voting to stay peaked at 78%, but has since fallen sharply to 68.5%, according to odds from Betfair. This is in contrast to an ORB poll carried out by the Independent, which showed the leave camp to have a 10-point lead with 55% of voters saying they were following leave campaigner Boris Johnson on 23 June.
Naturally, sterling has borne the brunt of uncertainty around the outcome. And the latest round of polling has not helped. It is now at its lowest level since mid-April at US$1.42 at the start of this week.
Estimates on the impact of leaving have been bandied around on both sides, with little acknowledgement of the margin of error within forecasts nor how protracted an unwinding of the UK’s relationship with the EU is likely to be. The economic argument has generally favoured the vote to remain, but everyone concedes that neither side has fought a particularly eloquent battle, with confusion still reigning and a lack of understanding prevailing among many voters.
David Cameron has staked his claim on retaining his post of UK Prime Minister in the event of a remain outcome. And although it has not been stated overtly, it would seem that Boris Johnson is the frontrunner for Prime Minister in a post EU Blighty.
It goes without saying that turn-out is of paramount importance, particularly to the remain camp. Older voters will more reliably turn up to polling stations and the stats show they are more likely to be leave supporters. Voter apathy is much more prevalent among younger generations, the majority of whom do want to stay in Europe.
Political hyperbole and electioneering shenanigans aside, at Duncan Lawrie, we will be closely monitoring the situation and assessing Brexit’s likely impact on our long term expectations for clients’ portfolios.
All data has been compiled by Duncan Lawrie from sources believed to be reliable. Full details of sources are available on request.
The comments and figures in this document are generally applicable but you should always take specific advice to suit your individual circumstances before taking any action. Errors and omissions excepted.
The value of investments and income generated may fall as well as rise, and investors may not get back the amount invested. Past performance is not a reliable indicator of future results.