What are the Chances of a Brexit? Should You Be Concerned?

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What are the Chances of a Brexit? Should You Be Concerned?

April 04, 2016

 So how will Britain vote this June 23? To remain a part of the European Union; or to forsake ties with the European Union, permanently? June 23 promises to be the biggest day in recent British history. It will certainly have a huge impact on those who are looking to sell an overseas property.

So what do the polls tell us about which way people will vote in the referendum? Fact is, polls are not always reliable, as this was made clear by last year’s general election in which most of the polls predicted that Prime Minister David Cameron’s Conservative Party would lose the election to the Labour Party and that Ed Miliband would become the new Prime Minister.

It didn’t turn that way, as we soon found out. The Conservative Party not only won the election, but won a simple majority. There is a reason why polls are so inaccurate – pollsters only survey a tiny section of the population and people who take part in these surveys are often unreliable. Some change their mind at the last minute, some don’t vote at all, and many simply mislead the pollsters, deliberately lie about their true intentions.

Even so, polls are still the best way to know which way the British public will vote in the referendum on the EU on June 23. So there have been 22 major opinion polls held in Britain since December last year. 13 say that the public wants Britain to stay in the EU and 9 suggest that the majority wants to leave the EU.

Again, as you can see, there’s no unanimity over what’s going to happen. But if you take an average of the polls, you will see that the side that wants Britain to remain a part of the EU comes on top.

 An important factor worth noting is that most of the polls that say that Britain will remain a part of the EU were conducted by phone, while those that say that there will be a Brexit were done online. As the results of the general elections prove so well, polls that are done by phone reflect what’s going to happen in the polling booth better than those were only conducted on the internet.

 As ComRes, the agency that carried out one of these polls says: "At a referendum, there is a much more low information electorate, making any polling about the issue particularly sensitive to differences in the political engagement of the sample being surveyed. This engagement gap makes little difference if you are responding occasionally about your opinions of satellite TV or your favourite chocolate bar, but on controversial subjects like the EU, where a minority hold their opinions strongly and the rest are less committed, it can make a crucial difference.”

What about the bookies? Okay, this is where it gets interesting, as the gambling odds often reveal the true picture, more so than any referendum, as people who bet put their money on what they believe to be the most likely outcome. So they have a strong incentive to look past their biases and bet on the most likely outcome.

What so the betting odds tell us? They suggest that the side that wants Britain to remain in the EU is well ahead, make no mistake about that.

What about the financial markets? The financial markets are shaky, as you would expect them to be, the pound hasn’t been performing that great over the last couple of months, but this is only natural.

Goldman Sachs believes that the pound could lose about a fifth of its value if Britain leaves the EU. The truth is, nobody really knows what’s going to happen on June 23. We can only suggest wait and watch