Bookies know the score when it comes to Brexit

25 May 2016 - 09:37 By Reuters

Investors seeking guidance on whether Britons will vote to leave the EU are relying as much on bookmakers as the established trackers of political trends. A month before the Brexit referendum, bookmakers are offering something that polls have failed to provide: a clear trend.Bookmakers are offering odds of 1/6 - indicating a more than 80% probability - that Britain will vote to remain in the EU on June 23. By contrast, opinion polls present a confusing picture of voters' intentions, with some saying the "remain" camp has a big lead while others have put the two sides neck-and-neck. "Betting is the market's attempt to summarise the polls," said Insight Investment currency fund manager Paul Lambert.He says he looks more at the odds than the polls when deciding how to trade currencies affected by the vote.With most economists agreeing that the British economy would take at least a short-term hit from leaving the EU, financial markets are sensitive to any signals on how the nation will vote. Sterling strengthened sharply last week after an Ipsos-Mori poll showed 55% supported remaining in the EU, with only 37% backing Brexit.Bookmakers say they can set the odds to incorporate nuances that polls cannot, such as psychological research, suggesting that undecided voters tend to opt in the end for the status quo.In this case, that means voting to keep Britain in a bloc it joined more than 40 years ago. ..

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