June 01, 2016
Leave is surging ahead
It was only a week ago when we wrote that the Remain campaign was pulling ahead, but that it was too early to give the all-clear as events tend to intrude. That seemed to have happened in the last week, as the Leave campaign is now once again leading in the latest polls. Two ICM poll's in the Guardian show Leave ahead. The remarkable thing is that for the first time, both the online and the telephone polls agree. The phone poll has 45% in favour of leaving, and 42% in favour of Remaining, while the online polls put the numbers at 47% in favour of leaving and 44% of remaining. The figures are telling us that there are still undecided voters out there, but their number is not very large. If you exclude the undecided voters, both polls have 52% in favour of Leave and 48% in favour of Remain. The article in the Guardian says that the phone polls show a trend towards leaving, and that the Remain's camp main message - of economic havoc - does not seem to strike a chord with the undecideds.
The polls of polls also suggests that there has been a trend towards Leave in the last week. The following extract goes back to May 15, the last time ICM had two consecutive polls out on the same day. At the time the phone poll was firmly in favour of Remain. Here is a summary of the latest polls:
Ashoka Mody has a scathing comment about the economic arguments used by the Remain campaign. He says the economic case essentially rests on the assumption that trade with Germany will decrease while trade with the US will not increase. This is nonsense. British trade with Germany will not decline significantly. Trade is embedded in business and social networks into which partners have invested enormous social capital. All productive trading relationships will remain intact, especially so since Germany runs a trading surplus with the UK. Mody writes that most of the estimates of a big shrinkage of GDP assume a fall in productivity growth. But there is no evidence that less trade lowers productivity growth. There is simply no logical connection. The most outrageous claims of all were those of the Bank of England, which has been blaming the referendum for the slowdown in investment. The truth is that the global economy is slowing down.
"The Bank of England is cynically exploiting its authority by claiming to detect Brexit-induced anxiety in the cloud of short-term data. But more outrageous is the Bank’s warning of mayhem if Britain votes to leave. Nobel Laureates George Akerlof and Robert Shiller have explained that people act in accordance with the narratives they live. The Bank is, in effect, building a narrative of panic, which could become self-fulfilling. The central bank’s proper role is to reassure and stand-by to stem panic."
George Magnus makes one important point (among a series of lesser points). It is not about economic as such, but about economic security:
"Whether you’re a 'Remainer' or a 'Leaver', you can’t duck the reality that the world economy has become a more dangerous place since the financial crisis. Great economic uncertainty and nationalism are rife in Xi Jinping’s China and Putin’s Russia. In the US, we may hope that Hilary Clinton secures the White House to temper these pervasive trends, but a Trump presidency that would exacerbate them is a realistic possibility... We have the choice to stick with our neighbours and try to deal with a complex world as it is, or leave them to find our feet in a benign, welcoming world that simply doesn’t exist."
Enda Kenny, meanwhile, has urged Irish voters in Britain to back the Remain campaign. He said a Brexit vote could result in reinstating border controls between Northern Ireland and the Republic. Kenny is the third foreign leader to intervene in the British campaign, after Barack Obama and Shinzo Abe. He also warned that Brexit would "adversely" affect Ireland’s ability to trade with Britain. Kenny’s intervention comes after 30 Irish opinion formers, business leaders, and media figures, working in Britain urged their compatriots in a letter to the Guardian to back the Remain side. They estimate that about half a million first-generation Irish are living in England, Scotland and Wales. The number rises to millions when second and third generations are included.
And finally, we noted an FT report that hedge funds have commissioned their own polling on election day, which is in line with the rules that allowing poll on election, but not publication. Delphine Strauss argues that there is probably not much value in this since it will be hard to construct a reliable exit poll from scratch. The reason exit polls have become accurate at general elections is because they are conducted time and again at the same polling stations. There are no precedents for a referendum.