With two days to go, Britain's EU referendum on a knife-edge

[June 21, 2016]  By Michael Holden
 
 LONDON (Reuters) - With two days to go until a referendum on EU membership that will shape the future of the European Union and the West, polls and surveys indicated British opinion is so divided that the outcome is too close to call.

Britons vote on Thursday on whether to quit the 28-nation bloc amid warnings from world leaders, investors and companies that a decision to leave would diminish British political and economic influence, unleash turmoil on markets and send shock waves around the Western world.

As each side sought to play its last trump cards, the pro-EU "Britain Stronger in Europe" campaign issued a final poster of a door leading into a dark void with the slogan: "Leave and there's no going back."

And former England soccer captain David Beckham, a hugely popular celebrity, added his voice on Tuesday to the list of Remain supporters. "For our children and their children we should be facing the problems of the world together and not alone," he said.

Leave campaigners meanwhile stepped up their relentless focus on what they call uncontrolled immigration, saying Prime Minister David Cameron had been warned four years ago his goal of reducing net arrivals was impossible due to EU rules.

The EU - already shaken by differences over migration and the future of the euro zone - would lose its second-largest economy, one of its top two military powers and by far its richest financial center.

George Soros, the billionaire who bet against the pound in 1992, wrote in an article for the Guardian newspaper that a vote to leave would trigger a bigger, more disruptive devaluation than the fall on Black Wednesday, when market pressure forced the British currency out of the European Exchange Rate Mechanism.

Sterling has been climbing on recent days on the back of more positive opinion polls suggesting the mood of the public was swinging behind the "In" camp, but even its supporters said the result was on a knife edge.

"Things have improved for the 'Remain' side in last few days but it could still be very close ... I have more confidence over the last few days," junior finance minister Greg Hands told investors at a conference on Tuesday.

An ORB poll for Tuesday's Daily Telegraph newspaper found support for Remain at 53 percent, up 5 percentage points on the previous one, with support for Leave on 46 percent, down three points.

"All the signs of ORB’s latest and final poll point to a referendum that will truly come down to the wire," said Lynton Crosby, a political strategist who advised the ruling Conservative Party at the last national election in 2015.

The "Leave" camp had "failed to quash the almost ubiquitous perception that it is the riskier of the two options," he said.

Social research body NatCen also published a survey that found Remain on 53 percent and Leave on 47 percent, using a method that took on recommendations by an official inquiry into why pollsters got last year's election wrong, although its research was conducted from May 16 to June 12.

However, an online poll by YouGov for The Times showed Leave ahead on 44 percent, up one point, with Remain on 42 percent, down two points.

Campaigning was suspended for three days after the murder of pro-EU lawmaker Jo Cox, who was shot and stabbed to death in her constituency in northern England last Thursday.

The killing led to soul searching about the campaign and its tone, with Jeremy Corbyn, leader of Cox's opposition Labour Party, saying her murder was likely "extreme political violence".

Some "Leave" campaigners accuse the "Remain" camp of exploiting the death as part of what they portray as a campaign of scaremongering over the referendum by the establishment at home and abroad.

Accountant Robin Phelps, a supporter of "Britain Stronger IN Europe", campaigns in the lead up to the EU referendum at Holborn in London, Britain June 20, 2016. REUTERS/Luke MacGregor

Turnout is predicted to be key to the result, and the ORB poll found that Remain supporters, who had been regarded as being more apathetic, were becoming increasingly motivated to vote as polling day approaches.

STERLING AND SHARES BOOST

Prior to the murder of Cox, polls had shifted towards "Leave", and the indication that an "In" vote was now more likely has boosted sterling and shares. Britain's FTSE-100 shares index jumped 3 percent on Monday while on Tuesday the pound was at a three-week high against the dollar.

According to Betfair betting odds, the implied probability of a British vote to remain in the EU was 75 percent. But analysts in the financial markets were more cautious.

"In our view, the sub-30 percent odds of an exit vote being implied by betting markets, for example, are placing more weight than we would on the accuracy of the polling and the magnitude of a status quo bias effect," JPMorgan researcher Malcolm Barr said in a research note to clients.

"We will go into the vote without high confidence in predicting the outturn in either direction."

The "Out" campaign argues that it is the anti-establishment choice, and its message that EU membership has handed political control to Brussels and led to uncontrolled immigration appears to have struck a chord with many Britons.

That issue again gained prominence on Tuesday when Cameron's former close aide Steve Hilton said civil servants had told the prime minister four years ago that his target to cut net immigration to the tens of thousands was unachievable.

"We were told, directly and explicitly, that it was impossible for the government to meet its immigration target as long as we remained members of the EU, which of course insists on the free movement of people within in," Hilton, who has said he backs Brexit, wrote in the Daily Mail newspaper.

Those wishing to stay in the bloc, including Cameron, have focused on what they describe as the economic advantages of EU membership and the risks posed by leaving.

Pro-EU leaders, including former prime ministers Tony Blair and John Major, have warned that an exit could also trigger the break-up of the United Kingdom by prompting another Scottish independence vote if England pulled Scotland out of the EU.

The Remain camp not only boasts support from the majority of senior business figures and world leaders such as U.S. President Barack Obama and Angela Merkel, but also well-known stars from stage, screen and sport.

(Additional reporting by Elisabeth O'Leary, John Geddie and Estelle Shirbon; Editing by Guy Faulconbridge and Paul Taylor)

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