Brexit Seen ‘Extremely’ Probable by Axa Chief Underscores Risk

The Sun Urges U.K. to Vote 'Leave' on June 23
  • ‘Leave’ campaign ahead in both phone and online polling
  • Biggest-selling newspaper uses front page to support leaving

France’s largest insurer warned that there’s “extremely high” probability the U.K. will vote to leave the European Union, in a further sign that Prime Minister David Cameron’s efforts to convince voters to stay are falling short.

The comments by Axa SA Chief Executive Officer Henri de Castries underscored the work that Cameron has to do to persuade the public in the nine days of campaigning before the June 23 referendum. Stocks and the pound dropped on Tuesday after four polls put the “Leave” campaign ahead of “Remain” and The Sun newspaper came out in favor of a so-called Brexit.

Neither the U.K. nor the EU as a whole is prepared for the negotiations that would follow a vote to leave, and investors would face “a true landscape of uncertainties,” de Castries said at a conference in Paris. He warned that other countries could be encouraged to seek special treatment, threatening “to accelerate the unraveling of Europe.” Even in the case of a vote to stay, “the situation isn’t simple either, and this is underestimated by lots of people,” he said.

The government’s strategy to keep the U.K. in the 28-nation EU is under increasing strain in the final days before referendum, as the “Leave” campaign’s focus on reducing immigration appears to resonate more with voters than Cameron’s warnings of economic recession outside the bloc.

Rush to Havens

Sterling approached a two-month low against the dollar and investors rushed to havens after the slew of new polls put “Leave” ahead, prompting a member of Parliament’s Treasury Committee, Wes Streeting, to say that “the warning signs are already there” of the damaging impact of a Brexit.

“Turning our back on Europe would wreck the British economy, putting millions of hardworking British people’s financial stability at risk,” Streeting said in a statement. “The ‘Leave’ campaign can’t dismiss the evidence.”

The Vote Leave campaign countered with an attempt at economic reassurance, promising that spending post-Brexit would be maintained on all the things the EU currently funds such as university research and farm subsidies, as well as cutting tax on fuel and increasing spending on the National Health Service. “We’re going to take back control of the money we send to the EU,” Employment Minister Priti Patel told the BBC. “The government of the day will have options and choices as to how to spend that money.”

Why the U.K. Is Voting on Whether to Leave the EU: QuickTake

Jeremy Corbyn, leader of the opposition Labour Party, lined up with union leaders in the left’s biggest show of unity in the campaign to call on working people to vote for Britain to stay in the EU.

“Staying in the European Union gives us the opportunity to defend and extend the rights of people at work, gives us the jobs we need,” Corbyn told reporters in London, where he appeared with his party’s senior spokespeople and the leaders of Britain’s biggest labor unions. If there is a leave vote, “many at work will be significantly worse off when the bonfire of regulations promised by others take place,” he said.

‘Move is Real’

With latest polls pointing to a ‘Leave’ advantage, the NumberCruncherPolitics estimate of the probability of a Brexit surged to 32.6 percent from 23.7 percent. Its creator, Matt Singh, wrote that “we have ample evidence that the move is real.” Oddschecker’s survey of bookmakers’ implied probabilities rose to 42.5 percent on Tuesday morning from 33.5 percent a day earlier. “The momentum is such that it seems inevitable Brexit will be favorite by the weekend,” said William Hill Plc spokesman Graham Sharpe.

John Curtice, professor of politics at Strathclyde University in Glasgow and one of Britain’s leading experts on opinion polling and elections, put the likelihood of a Brexit at about 33 percent, up from 25 percent three weeks ago.

“This is an issue on which the British public have always demonstrated the potential to vote to leave,” Curtice said in a Bloomberg Television interview Tuesday. Still, Curtice said, the movement in the polls is not large, and often in referendums voters move back to the status quo in the final days of the campaign. “Clearly one of the crucial things between now and June 23 is whether or not the polls do move back towards ‘Remain’ as voters look at the risks of leaving.”

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