Sterling falls as poll shows strong support for Brexit

Britain’s FTSE-100 share index snapped a three-month run of gains and sterling fell against all of its major peers yesterday as two new opinion polls surprisingly indicated that UK voters now favour the country leaving the EU.

Sterling falls as poll shows strong support for Brexit

An ICM phone poll showed 45% support for a Brexit, with 42% saying they wanted the UK to remain in the EU. The remaining 13% said they were undecided.

Combined with another online poll, also carried out by ICM, voters now appear split 52% to 48% in favour of Brexit.

The results are in stark contrast to a previous survey which put the pro-EU camp ahead.

As a result, sterling fell 0.85% against the dollar and 0.78% against the euro. All major stockmarkets were hit; the FTSE down 0.64%, the CAC-40 in Paris down 0.53% and Frankfurt’s DAX exchange slipping 0.68%.

“Another day, another EU referendum poll,” said Joshua Mahony, market analyst at IG. “However, this time it was different, with the ICM phone poll providing a big swing in favour of the ‘leave’ campaign.

“Widespread selling for sterling and an immediate flight to safety signifies the fact that markets have been caught napping with an overconfidence that every poll would come out in favour of the Remain campaign.

“However, it is worth noting that ICM surveys typically do favour a Brexit, with phone polls often coming out more heavily on the ‘leave’ side too. As such, while this will be a worry to some, the real test is whether the likes of the Ipsos MORI or ORB polls can be turned around.

“With IG clients currently showing a 77% chance that the UK will remain within the EU, it is clear that today’s poll may be an outlier rather than the average.

“With the FTSE attempting to break out of its 30-point range that has dominated the past week, this could set the groundwork for a very volatile week.

"[Yesterday saw] a substantial amount of data released, and with a whole week of economic data risk ahead, traders will be wary of increased unpredictability in the coming days.

ICM’s Martin Boon said the poll “rather unhinges a few accepted orthodoxies”, saying that “both our phone poll and our online poll are consistent on both vote intentions and on the EU referendum”.

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