Inside Financial Markets

EU referendum results live: Brexit wins as Britain votes to leave European Union

brexit mapEU referendum results live: Brexit wins as Britain votes to leave European Union

THOUGH the result remained too close to call four hours after polls closed, it is already clear that a referendum on whether to stay in the European Union has triggered an angry revolt by millions of British voters against their government, the leaders of the main political parties, big business and experts of all stripes. First returns and television interviews with voters and (slightly shell-shocked) political grandees painted a picture of a United Kingdom divided sharply along lines of region, class, age and even—in the case of Northern Ireland, where such Roman Catholic areas as Foyle voted Remain while Protestant areas like North Antrim went for Leave amid much higher turnout—by religious denomination. If the public had quietly weighed the costs and benefits of EU membership, it was often hard to hear that analysis through a din of stuff-the-lot-of-them rage from the Leave camp, and the first growls of mutual recrimination among Labour and Conservative politicians backing Remain.

As the night began it appeared that “Leave” camp had done better than expected in rain-lashed, post-industrial northeastern towns with names from a George Orwell story, like Sunderland and Hartlepool, or gritty corners of Essex. Remain had its early strongholds, such as Orkney and Clackmannanshire in Scotland, but turnout in such places underperformed. Leave won in Sunderland by 22%, while Newcastle—a larger city with many students—voted for Remain by a margin of 1%, which was tighter than predicted.

Turnout was reported to be lower than Remain campaigners had hoped in London, a city expected to provide deep reservoirs of the sort of higher-income, better-educated and non-white voters who have consistently told pollsters they want to stay in Europe. The capital suffered heavy rain and transport chaos on referendum day, which probably did not help. Against that, some of the first London boroughs to declare, such as Wandsworth, showed a stronger-than-expected 75% vote for Remain. At least going by first results, Wales seemed to have parted company with its Celtic brother, Scotland. Labour-voting former mining valleys and blighted post-industrial towns seemed to be swinging towards Leave.

The jumpy mood was felt in financial markets. Currency traders being an impatient bunch, they were quick to celebrate after voting stopped at 10pm, as a YouGov opinion poll was released showing Remain ahead by four percentage points. Nigel Farage, the leader of the United Kingdom Independence Party (UKIP), said Remain seemed likely to “edge it”—a semi-concession that he later retracted. The pound rose to $1.50, its highest level since December, only to plunge as the first results began to trickle in, showing a stronger than expected Leave vote in the gritty northern English city of Sutherland, at one point dropping by more than 3% to below $1.43 in a few seconds.

Referendum night felt all the odder because the Remain and Leave camps are themselves internally incoherent. Voting had barely ended when Douglas Carswell, a romantic, libertarian former Conservative member of parliament who defected to UKIP, denounced his own party leader, Mr Farage, for a poster unveiled a few days ago, which showed dark-skinned refugees crossing a field in eastern Europe, beneath the slogan “Breaking Point”. Mr Carswell said: “I think it was morally the wrong thing to do. Angry nativism doesn’t win elections in this country.”

But if anything the Remain camp was even less united. David Cameron, the Conservative prime minister, only agreed to hold this referendum in 2013 in a moment of political weakness before the most recent general election, as his own members panicked about the threat of UKIP and agitated for a chance to vote on a European Union that most rank-and-file Conservatives dislike or actively loathe. Mr Cameron is no instinctive lover of the EU and struggled to make a positive case for continued membership. Having offered unrealisable promises to reduce net immigration into Britain to tens of thousands a year, he was unable to defend the free movement of workers and people that is one of the EU’s founding pillars. Instead of pointing out that migrants make a positive contribution to the British exchequer, he had to argue that leaving would cause a self-inflicted recession. That may have been true, but did nothing to inspire enthusiasm among voters trying to make up their minds.

As voting ended, the Conservative parliamentary party mounted a display of unity. More than 80 Tory members of parliament who want to Leave, including such leading Brexit campaigners and rivals as Boris Johnson, the former mayor of London, signed a letter saying that Mr Cameron should remain as prime minister. But if Britain does vote Remain, the prime minister will be able to use that letter to light his firing-squad cigar, as his party—metaphorically—takes him out and shoots him. Labour also seems likely to tear itself apart, after its hard-left leader, Jeremy Corbyn, campaigned half-heartedly for Remain and the party’s leaders were forced to confront their abandonment by English working-class voters fired up by Leave’s message of anti-globalisation and haul-up-the-drawbridge nativism.

After an often ugly campaign on the Leave side, full of untrue warnings about Turkey joining the EU, bringing 76m Turks into the union, and made-up figures about the sums that Britain pays into European budgets, politicians who have worked for years to pull Britain out of the union seemed strangely muted as results flowed in. Their shock is appropriate. Something enormous is happening in Britain—a country that scorns its rulers and is done with deference. Whatever the final result, divisions have opened that will take a long time to heal.

Sanie Khan

Sanie Khan holds a deep knowledge of the financial markets in Pakistan. Based in Karachi, he has over 20 years of hands-on management experience in financial technologies and managing operations in the financial sector. He was the General Manager at the Pakistan Stock Exchange (PSX) for 17 years. He along-with senior members of Exchange

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Inside Financial Markets was a joint publication of Pakistan Stock Exchange (PSX)and Society of Technical Analysts Pakistan (STAP)