History and Headless Chickens: Brexit Odds Change (But Not Enough)

Five of the last eight polls taken on Brexit were in favor of “leave”, two in favor of “remain”, and one was neutral.

by Mish

In the wake of those polls, odds on Brexit have shifted. But “remain is still heavily favored”.

Did the odds shift enough?

Betfair 28% Leave

The Financial Times reports Betting Odds Tilt Towards Brexit.

Following a raft of new opinion polls swinging towards ‘Leave’, the betting markets are the latest to send jitters to the UK’s pro-EU camp.
The probability of a “Brexit” vote has increased to 28 per cent according to bookmakers Betfair – a jump from 19 per cent seen at the end of May.
Although the Remain camp is still in a comfortable lead with a 72 per cent chance of victory, the latest set of odds show “the outers have gained momentum” said Betfair.
A survey of Daily Telegraph subscribers, carried out by the newspaper, showed 69 per cent of its 19,000 readers, intended to vote ‘Leave’.

Ladbroke 32% Leave

A poll by Sir Lynton Crosby shows In camp’s lead on the economy has fallen from 21 to just eight points.
Two recent polls – including, crucially, a telephone survey for the first time – have put the Leave campaign in front. In response, bookmakers are repricing bets on Brexit, especially as the vast majority of money being gambled is for an Out vote.
Coral is now offering 7-4 on Leave, down from 5-2, says the Daily Express, as 90 per cent of bets in recent days have been on a Brexit.
Ladbrokes’s referendum tracker has the chances of a Leave victory at 32 per cent, up from 27 per cent.
This means that Remain is still a clear favourite and in most places it remains odds-on, but bookies’ confidence is being eroded.
Elsewhere, the latest weekly survey conducted by respected analyst Sir Lynton Crosby shows Remain still has a lead, but this has fallen to just one point at 48 to 47 per cent among those who will definitely vote.
Writing in the Daily Telegraph, Crosby says Remain is seen as best for UK economic prospects, ahead by 45 to 37 per cent. But it is worth noting that as recently as 23 May, its vote share on this issue was 54 per cent and its advantage 21 points.
Another poll earlier this month by Ipsos Mori found seven in ten voters believe they would be no worse off five years after a vote to leave the EU.
A new poll by Opinium for The Observer put Leave ahead on 43 to 40 per cent, while a YouGov poll for ITV will show it having a lead of four points on 45 to 41 per cent. A poll of the most recent six polls has shown Remain’s long-term lead narrowing markedly to just two points, on 51 to 49 per cent, the FT says.

Bookie Confidence

Once again we see a silly claim by writers who do not understand how bookies work. Odds have nothing to do with confidence of bookies. Odds have everything to do with confidence of the betting public.

If the books are balanced (and that is the point of betting odds) bookies do not care who wins or loses. If books get unbalanced by a sudden last minute shift, then bookies might care.

Most of the money is still on “remain” so the payout is low for those betting that way.

Is there collective wisdom in betters?

Number Cruncher 24% Leave

Despite sudden, significant, change in sentiment, Matt Singh at Number Cruncher Politics has come out of a week long slumber to report Brexit Likelihood has Increased, but Remain is Still Favourite.

Another History Lesson?

Singh says “Leave would need to be leading by more than 4 points at this stage to be considered favourite by the model.”

He concludes with “So while everyone is having fun running around like headless chickens, the clear-headed NCP assessment is that although Leave has had a good start to the campaign, Remain is ahead, and history suggests it’s favourite to remain there.”

Overconfidence Based on “History”

Singh could very well be right about “remain” even if his odds are way off.

He sounds remarkably like Nate Silver who kept citing historical reasons why Donald Trump would not win the nomination.

As with Nate Silver, I suggest Brexit watchers would be advised to pay attention to trends, not history.

Brexit Trends

  • A telephone survey by the Guardian the first time put the Leave campaign in front.
  • A new poll by Opinium for The Observer put Leave ahead on 43 to 40 per cent.
  • A YouGov poll for ITV says leave has a lead of four points on 45 to 41 per cent.
  • A poll by Sir Lynton Crosby shows the In camp’s lead on the economy has fallen from 21 to just eight points.
  • A poll by Ipsos Mori found seven in ten voters believe they would be no worse off five years after a vote to leave the EU.

If this trend continues, “leave” is going to win. There is no reason to believe the trend will change, but it easily could.

Headless Chickens

As for who is running around like a headless chicken, look no further than prime minister David Cameron.

His over-the-top fearmongering campaign “Brexit Like Putting a Bomb Under the Economy” is laughable.

In his latest speech, Cameron repeated his warning of a “decade of uncertainty” if Britain leaves the EU. He also accused the Leave side of “sticking pins on a map” over how a future trade arrangement would work.

These kinds of blatant, obvious, lies will not win votes.

There is still time, for Remain to pull it out, but the odds are far closer to 50-50 than those betting on “history” suggest.

Cameron’s “headless chicken” fearmongering campaign may just be the final force that hands Leave a victory.

Mike “Mish” Shedlock

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