The pound has risen to a six-month high and the FTSE 100 has rallied strongly amid growing expectations among investors that Britain’s EU referendum will result in a vote to stay in the bloc.
An opinion poll published on Thursday morning – but conducted before voting began – gave a lead to the remain camp and helped boost the UK currency. Amid relief that weeks of uncertainty will soon be over, sterling rose 1.5% to $1.4931 against the dollar. That was the first move above $1.49 since December 2015.
“Even though we all know that polls can be rubbish, the markets seem quite happy that the remain camp has done enough to win,” said Kathleen Brooks, research director at spread-betting firm City Index.
Shares and the pound were higher from the open and got an extra fillip after the publication of an Ipsos Mori poll conducted for the Evening Standard newspaper showed a four-point lead for remain.
The mood was echoed on stock markets, where the FTSE 100 index hit a two-month high. The index of leading shares was up 1.5% at 6357 in mid-morning trading, buoyed by mining shares as copper prices rose. There were also gains for other bourses around Europe with Germany and France’s main share indices up almost 2%.
The FTSE and pound have been buffeted by close opinion polls in recent weeks but in the past week market sentiment has swung to show growing confidence in a vote to remain in the EU. The FTSE has rallied every day this week and is so far up more than 5.5% from last Friday’s close.
here it is 52% REmain and public expect Remain win pic.twitter.com/aF3hmmI17q
— Ben Page, Ipsos MORI (@benatipsosmori) June 23, 2016
With polls open from 7am to 10pm, there are strict rules for broadcasters that mean they cannot report details of campaigning until voting ends. The relative quiet following months of daily referendum news made for a tense atmosphere on City trading floors, said Joshua Mahony, analyst at IG, an online trading company.
“Amid restrictions to broadcasters, there is an eerie feeling in the City, with a nervous energy evident as we await the fate of the nation,” said Mahony.
“Whatever the result, volatility is likely to be the name of the game and rumours of private exit polls from the hedge funds means that there is likely to be some substantial swings as speculative positions are placed into a relatively illiquid market.”
