Roger Bootle of Capital Economics has a good book on this
I personally get a kick of seeing the establishment embarrassed and in this case defeated. The politicians are gasping for air now and resorting to fear mongering. The arguments from the stay camp are getting ridiculous… They think people are stupid enough to believe that German auto manufacturers will just stop selling vehicles to the UK or British tourists will be locked out of Europe.
So, what’s the opinion on the ground? Does this actually have the chance of going through? I’m not talking about the closet conservative neckbeards that populate online forums, but is there really a majority of people that want to leave EU? My guess is that people will play it safe, as gringo noted, the threat of economic calamity tends to overrule disdain towards being ruled by Brussels.
Polls are split 50/50 between Leave and Remain sides. However, betting websites (as shown below) show a probability of about 25% that the referendum will result in a Leave vote. Polls tend to be skewed, as they don’t always represent voting demographics correctly.
Brexit could be good for the UK in the long term. If the UK had known about the 2008 crisis, and that they would be stuck in an economic union with a bunch of deflationary, near bankrupt loser states like France, Italy, and Portugal, they might not have agreed to join the union.
The economic outcome of a Brexit to the UK is unclear. It is highly possible that trade with the EU will continue to operate with very little disruption. The referendum is just a formal public poll that, if it results in a Leave vote, will mandate UK politicians to begin to negotiate terms of an exit from the union. Since UK runs a significant current account deficit, it is in the best interest of other EU states to retain as much free trade as possible with the UK.
In addition, the UK will be free to negotiate its own trade agreements with non-EU countries, as opposed to taking hand-me-down policies from the EU block, which might not be optimal to the UK.
Net of benefits received, the UK pays the EU about 6 billion GBP every year. It’s likely that gains from trade offset this cost. However, as I stated above, it’s not obvious that a Brexit will actually result in significantly different trade policies. Every research piece that tries to answer the question “what policies will change in trade and immigration” say “I don’t know”. Brexit terms will have to be negotiated over at least 2 years. The outcome will probably be a compromise between UK and EU interests, much like the UK’s current arrangement within the EU.
(Another unappreciated point: the referendum is not binding. UK politicians can still defy the referendum’s outcome and not demand to leave the EU. Doing so would harm their careers, of course. Also, it’s not impossible that during the long negotiation of Brexit, the EU will present more favorable terms to the UK, compelling the UK to reverse its decision. You might recall the Greek referendum to reject EU austerity measures a few years ago. In the end, Greece accepted the austerity… it was just a big wahmbulance call.)
Also consider that the UK tends to be less liberal than the EU with respect to environmental policy, labor protection, and other socioeconomic policies that are costly to implement. Brexit would allow the UK to adopt pro business policies that will increase growth.
However, the highly likely negative effect of Brexit would be the short term negative economic shock. During the Brexit negotiations, uncertainty will cause companies to higher fewer people across borders and investors to commit less capital to long term projects. The worst case is that this sets the UK on a path of lower growth for many years. This is the outcome that the Remain side fears the most.
So having done some reading, I understand the case behind Brexit a bit more, and I no longer think it’s a matter of UK clinging at sovereignty and anti immigration issues. However, the short term risks of Brexit would be significant. So “maybe it will be better” might not be strong enough of an argument for leaving.
For what I´ve read, it´s not only about immigration issues from the “leave” side, but also restrictions to daily life (like the EU rules tries to ban a certain vacuum cleaner, for whatever reason). That´s what jangles the Britons nerves. From the economic view there should be no doubt about a “Remain” vote imo, neither in the long nor in the short term.
Primarily it is a cultural issue. British conservatives want to partner with the US, Can, Aus, and NZ, (in other words, white, English speaking nations) while British liberals want closer ties to the continent. To conservatives, being ruled in Brussels by Germans is like the US being ruled from Guatemala by Mexicans. Given that cultural and ethnic concerns are the core underlying factor in driving foreign policy, it is natural to want Brexit. The economic case is more muddled.
Their govt probably drummed up a bunch of bogeymen to scare them like ours does every so often. Id imagine someone very wealthy with power wants it for personal financial gain.
I outlined the economic case above not to argue that it is the sole motivation for Brexit, but to summarize prevailing arguments on why Brexit could be economically beneficial to the UK, unlike what had been asserted here. If you were wondering, I believe that the potential economic benefits of Brexit do not justify the potential trade losses and material short term risks. However, it is important to acknowledge that there is a plausible economic justification for Brexit.
The Leave contingent is motivated by diverse factors - cultural “sovereignty” is one of them. However, it is hard to say that this is the main motivation for Brexit. If that was the case, then why would UK have agreed to join the EU in the first place? In today’s Brexit discussion, clearly, other positive factors from the EU’s formative years have become less valid, or new reasons have arisen that makes the union less appealing to the UK.
The worsening economy in the EU is one factor. UK has outperformed most EU countries since the crisis. If the EU as a whole had strengthened relative to the UK, the UK would experience more significant trade gains and less uncertainty about the union’s ability to support itself. The EU would also be more able to handle social issues, like immigration, without burderning the UK to the same extent.
Immigration and perceived overreaching of EU regulations are important considerations. Other EU countries experience many of the same rules as the UK. So, there must be something special about the UK’s position that compels them to consider Brexit. The sovereignty issue is certainly important. However, this is not as important as the belief that the UK can stand on its own economically and politically. Both the UK’s cultural ties to other countries, and its relatively strong economy contribute to this belief.
The word on the ground is that it aint gonna happen. Britain will not vote for Brexit on 23rd June.
this isnt helping lol
So “Stay” should benefit from sympathy votes? Gun toting right wing crazies in the UK too eh?
watching this live looks like LEAVE is up
holy sausages now bremain is winning
Oh yea… I’m all about watching this all night. I got into the scotch. I have all my screens up (VIX, currencies, oil) Binge watching Orange is the New Black. I’m glad I have my silly little VIX position. Makes me feel like I’m in on the action 
Leave is going to win. Scotland and Northern Ireland are already reported. This thing is is over and out.
^^^^^Leave means I make $45… weeeeeee! (This belongs in drunk analyst forum)
Going to be a great buying opportunity on British stocks tomorrow. I’ll be up all night digging into small/mid caps. Everything will be hammered, not everything has EU exposure!
I’m hoping so. If this happens and confidence in the Euro continues to detiorate (as it should, they’re a bunch of idiots that make the US look well governed) hopefully it will make my European vacations that much less expensive relative to USD. Fall pound/EUR, fall!