Bloomberg: Acrimony among Britain’s political and economic elite intensified as those campaigning to leave the European Union held a steady lead in opinion polls with a week to go until the referendum.
A day after Chancellor of the Exchequer George Osborne was accused of economic scaremongering by supporters of a so-called Brexit, Bank of England Governor Mark Carney hit back against accusations he’s sacrificed his independence to back the government.
Pleas from leaders of the 28-nation EU that Britain stay in the group and accusations of bad faith on both sides in the U.K. underscored the turbulence to follow the June 23 ballot whatever the result. Prime Minister David Cameron faces a struggle to unify his Conservative Party if the U.K. votes to stay, and could be cast from office if his side loses.
“If he wins this, the roughly two-thirds of the Conservative membership that are Eurosceptic will never forgive Cameron,” said Jon Davis, a professor at King’s College London. “Even though the Conservative Party believes in winners, this is the fight many of them wish he would lose.”
A survey by Ipsos MORI for the Evening Standard newspaper released on Thursday showed 53 percent support for leaving with 47 percent for remain, excluding those who said they didn’t yet know. The telephone poll of 1,257 adults, the latest in a string of surveys showing a steady lead for anti-EU campaigners, was conducted from June 11 to June 14. Another poll for IG Group by Survation showed 45 percent for leaving and 42 percent for staying, with 13 percent undecided.
“Until this morning I would have said to you that on the balance of probabilities, ‘Remain’ were the favorites,” John Curtice, professor of politics at Strathclyde University in Glasgow, told the BBC. “We no longer have a favorite in this referendum. There has to be a serious possibility that we will vote ‘Leave.”’
While measures of short-term market volatility have soared this month, suggesting investors are concerned, other gauges paint a more sanguine view. The pound has risen 1.6 percent since the end of February and bookmakers say that customers still have more money placed on “Remain” than “Leave” even as they shorten the odds on the likelihood of Brexit.
Carney’s Letter
Carney has come under attack from pro-Brexit senior Conservatives, including former leaders Michael Howard and Iain Duncan Smith. They accused the Bank of England and the Treasury of a “woeful failure” to present “a fair and balanced analysis” of the economic consequences of departure.
The central bank governor used a letter to another Brexit supporter, Bernard Jenkin, to argue the BOE has been correct to offer its “evidence-based judgment.” The missive was a response to a warning from Jenkin about rules banning “any public comment” during a pre-referendum blackout period, which the BOE has chosen to impose on itself voluntarily.
Jenkin’s correspondence “demonstrates a fundamental misunderstanding of central-bank independence,” said Carney. The governor has previously called an exit “the biggest domestic risk to financial stability” and warned it could trigger a “technical recession.”
Criticism of Carney and the independent BOE is “deeply concerning,” Cameron wrote on Twitter. “We should listen to experts when they warn us of the dangers of leaving the European Union.”
Battlefield Return
Carney’s return to the battlefield came after Osborne calculated leaving the EU could open a “black hole” in the nation’s finances that he would need to fill with an emergency budget of tax hikes and spending cuts. That drew condemnation from 65 of his fellow Conservative lawmakers who said they would vote against any such package.
The BOE on Thursday repeated its warning that quitting the bloc could “materially affect” the outlook for output and inflation. Fellow central banks including the U.S. Federal Reserve and Bank of Japan all cited the referendum as a factor in their policy choices this week.
Morgan Stanley economists meanwhile highlighted the closeness of the race by raising their probability of a Brexit to 45 percent from 30 percent. “The result is on a knife edge,” Jacob Nell and Melanie Baker wrote in a note to clients. Still, they said, “we expect a late swing in the polls” to “Remain,” as voters opt for the safety of the status quo.
‘Don’t Do It’
The EU’s leaders reiterated their desire for Britain to remain a member nation. President Donald Tusk said in Helsinki quitting the EU would be “a huge mistake” and he had an “obligation to be frank and fair with our argumentation.”
European Commission President Jean-Claude Juncker, speaking to Bloomberg on the sidelines of a conference in St. Petersburg, had a simple message to voters: “Don’t do it,” he said.
