Brexit or Bremain?…That is the question!
Brexit fears are clearly intensifying and our call that the Bremain vote will prevail on June 23 is getting increasingly uncomfortable. Admittedly, this is just stating the obvious as both opinion polls and betting market odds are indicating just that.
The outcome of the referendum remains uncertain as we wrote earlier (more details here and here). Opinion polls now suggest that citizens will vote to leave the EU but also reveal that around 15% of potential voters remain undecided. Betting markets, on the other hand, are suggesting that the majority will vote to stay but also that the lead is quickly losing ground.
Our base case scenario that Brexit will ultimately be avoided is built on the expectation that the (small) majority of voters, when confronted with the hard choice on June 23, will realize that leaving the EU will come with economic costs as the overwhelming majority of studies suggest. Moreover, there is talk about an increase in late registrations of younger voters who tend to be more in favour of staying in the EU. That said, this is hardly comforting and it could well turn out the other way. Brexit or Bremain? That remains the question.