Europe/Middle East

Brexit Explainer: An Expert Weighs In

The result of the U.K. referendum on European Union membership has been a surprise and massive shock to so-called “expert” opinion.

In addition, not just to academic opinion: The betting markets, which are supposed to be inhabited by experts at setting odds, were assigning just a one-in-seven probability to a majority for “leave” on the eve of the vote.

Brexit Reaction was Swift

The United Kingdom has voted by a close margin to leave the European Union. Here, experts from around the world react to the news which has sent shockwaves around the world and what it means for their country. This article will update.


Frédérique Berrod, professor of public law, Sciences Po Strasbourg and Antoine Ullestad, PhD candidate in European law, University of Strasbourg

If You Live in the UK, Your Personal Finances Face Changes

British people have woken up to the news that their country has voted to leave the European Union. Along with this, there has been turmoil in financial markets – the pound has hit a 30-year low and the FTSE dropped more than 8%.

Though the Brexit process will probably take two years (and the UK will remain a full member of the EU in the meantime), some aspects of the decision will affect British people straight away.

Turkey's Turn at the EU Plate

In the vitriolic debate over the UK's membership of the EU, Turkey's potential membership became one of the talking points.  Prime Minister Cameron, who has advocated Turkey's eventual membership, is likely correct in his assessment that this that if it does take place, it won't be anytime soon.  

The Markets Watch and Wait

The UK's referendum is underway.  The capital markets are continuing the move that began last week with the murder of UK MP Cox.  The tragedy seemed to mark a shift in investor sentiment.  Sterling bottomed on June 17 just ahead of $1.40.  Earlier today in Asia, after more polls showed a move toward remain, sterling rallied to almost $1.4845, its highest level since last December.

That the UK's EU Referendum is Happening at All is Significant

It is not just that the polls indicate that the outcome of the UK referendum is too close to call, but the mere fact that the referendum is being held in the first place is significant.  It was not Labour, but the Conservative Party that brought the UK into the EU in the first place (and in the 1975 referendum Thatcher was campaigning for Bremain) and into the ERM.  Now the issue is tearing the party apart. 

The Brexit's Known Unknowns

The UK’s EU referendum is too tight to call, which will virtually ensure protracted economic uncertainty, market volatility and political risk. The worst has already happened.

Young and Old Weigh in on the Brexit

The betting and events markets have shifted more decisively than the polls in favor of the UK to remain in the EU.  Sterling extended its rally from $1.4010 last Thursday to nearly $1.4785 today, as the market participants adjust positions. 

What is particular striking is that the asymmetrical perceptions of the personal impact of a vote to leave the EU.  The Great Graphic here was posted on Business Insider, which took it from Kantar, a research firm.

Over There

The Chair of the Federal Reserve testifies before Congress on Tuesday and Wednesday.  Given the recent FOMC meeting and Yellen's press conference, it is unlikely new ground will be broken. It is difficult for the market to price out a July hike more than it already has done.