The early results in the U.K.’s referendum on whether to leave the European Union suggest that the result is still on a knife-edge, with the government-led Remain campaign struggling to convert its narrow lead in the polls into actual votes.
With 33 out of 382 electoral districts having reported, the Leave campaign led by 53% to 47%, thanks largely to a string of big victories in the post-industrial heartlands in the North-East of England. The Remain campaign, as expected, had more success in Scotland, where voters went roughly 2:1 in favor of staying.
The early results badly shook the complacency of the foreign exchange markets, which had propelled sterling to a seven-month high after Nigel Farage, the leader of the anti-EU U.K. Independence Party, appeared to concede the vote on the basis of hearsay from his “friends” in the financial markets sector. He retracted that concession later. The pound tumbled more than 5% to below $1.42 as the BBC reported a senior Labour Party figure as saying privately that Leave would win. It had earlier traded as high as $1.5007. That kind of volatility hasn’t been seen since the 2008 financial crisis.
Analysts from Barclays reckoned that hedge funds and banks could trade as much as $95 billion during the small hours of Friday night, although market participants warned that trading turnover so far has been relatively light, given the early stage of the vote count.
Another factor holding the Remain campaign back may have been the torrential rain in London, which disrupted voting in the most solidly pro-Remain part of England. A sample of London boroughs indicated that the turnout there averaged 69%, perhaps five or six percentage points below the nationwide average.
Analysts interpreted the vote as being to a large degree a protest against the country’s political class, especially by the English working class that traditionally votes for the left-wing Labour Party. This segment of the electorate is roughly analogous to the blue-collar voters targeted by Donald Trump in the U.S. Election campaign.
Simon Hix, Professor of Political Science at the London School of Economics, tweeted that, by his calculations, the Remain campaign had outperformed expectations in only three districts, while under-performing in 16.
By my count, so far Remain over-performed vs. 50-50 model in 3 areas (all in Scotland) and under-performed in 16 (and by larger margins)
— Simon Hix (@simonjhix) June 24, 2016
“What we’ve got is a protest from communities that have been under the most pressure, and what the Leave campaign has done is to make a scapegoat of the European Union as the cause of that pressure,” Labour’s defense spokeswoman Angela Eagle told the BBC.