The British pound seesawed wildly today and betting markets dramatically shortened the odds on Britain leaving the European Union as increasingly mixed signals challenged earlier market anticipation of a narrow victory for "remain."
The pound initially soared as polls closed and two opinion surveys put "remain" ahead and two leading supporters of the "leave" campaign said it appeared the pro-EU side had won. But it then suffered its biggest fall in years, plummeting from about USD 1.50 to almost USD 1.40 as results began to show stronger-than-expected support for quitting the bloc.
With just about 6 million of an expected 16 million votes counted, the result was effectively a 50-50 split but "remain" was underperforming analysts' expectations.
"Few 'remain' strongholds are doing better than expected," said John Curtice, a University of Strathclyde political scientist and BBC election analyst. "There are far more places where 'leave' are doing better than expected."
"It may be possible that the experts are going to have egg on their face later on tonight," he said.
The Betfair market predicted a 51 per cent chance of Britain leaving the EU the first time in the referendum campaign the option has become the favourite. Bookies' odds on Brexit also shortened to as short as 6-5. They had been 5-1 only hours earlier, as polls pointed to a "remain" win.
The first results, from England's working-class northeast, were a smaller-than-expected "remain" win in Newcastle and a bigger-than-expected "leave" vote in nearby Sunderland. The "leave" side also outperformed expectations in other areas of England, though "remain" was ahead in early Scottish results. There was better news in London, where the first districts to declare had strong "remain" majorities.
A vote to leave the EU would destabilise the 28-nation trading bloc, created from the ashes of World War II to keep the peace in Europe. A "remain" vote would nonetheless leave Britain divided and the EU scrambling to reform.
As the polls closed yesterday, UK Independence Party leader Nigel Farage set a downbeat tone for the supporters of a British exit or Brexit from the EU, telling Sky News television "it looks like 'remain' will edge it" in the referendum, sending the pound to a 2016 peak of USD 1.50.
But he walked back those comments later, telling reporters at a "leave" party in central London that "maybe just under half, maybe just over half of the country" had voted to pull Britain out of the EU.
The most recent polls had suggested "remain" had a narrow lead.
Pollster Ipsos MORI said a survey conducted on Wednesday and yesterday suggested the "remain" side would win Britain's EU referendum by a margin of 54 per cent to 46 per cent.