The Brexit Daily, June 23 2016: The Moment of Truth
SO IT ENDS — OR RATHER, BEGINS. In around 20 hours, we will know whether the people of Britain have voted to stay in or leave the European Union. The final day on the hustings was a predictably frantic affair, notable chiefly for Gordon Brown’s impassioned speech for Remain at the University of Birmingham and Michael Gove’s apology for comparing pro-EU economists to Nazis — a fitting end to a campaign in which Hitler has jostled with fish as the top novelty act. In the digital arena, Out continues to drive more of the overall Brexit conversation — but momentum is with In and the gap between the two sides is now paper-thin.
Tribalistic and hostile, this referendum has provided a powerful demonstration of the growing importance of digital messaging to political campaigns, especially in the developed world. Political conversations on social and collaborative media are now so content- and participant-rich that their volatility can be measured and monitored to get a sense for how momentum is shifting between campaigns over the course of an election cycle. For investors, this will be an increasingly important metric — in addition to polls and the betting markets — to consider as the dawning age of digital politicking matures.
Given the deep fissures within British society exposed by the referendum campaign, the UK’s political class will need to work hard to bring the public with it as it negotiates the next stage of Britain’s relationship to Europe — whatever that looks like. The public mood will matter just as much once today’s outcome is known as it has over the last four months — and fluctuations in the intensity of digital conversation about the issues at stake in the referendum will offer an important reference point to anchor our understanding of that mood. Predata will continue to monitor the digital volatility of Britain’s European debate, along with variants of it throughout other EU member states. In the short term, look out for a fuller analysis of our monitoring of the digital campaign — and how it compared to the final referendum outcome — in the days to come.
- Today’s digital campaign score: In 55.74% vs. Out 59.32%. (Yesterday’s score: In 59.03% vs. Out 62.03%.)
- In the language of the pollsters, the race is too close to call: the Out camp has enjoyed a comfortable lead in the digital arena for long stretches of the past month, but in recent days the gap between the two sides has narrowed to its slimmest point of the entire campaign.
- Given how far out of the game it was 10 days ago, Remain continues to carry all the momentum as voters head to the polls.
- The video of David Cameron’s Sunday night performance on the BBC’s Question Time was among the top drivers of online interest in Brexit yesterday, along with his June 8 ITV debate appearance next to Nigel Farage.
- The story of the campaign can be told as the chronicle of how its different personalities’ online profiles have fluctuated over the last three months.
- For Leave, Farage was the focus early on, in March and April, before Boris Johnson and Michael Gove — representing the official Vote Leave campaign — came to dominate the digital conversation. A week ago all three jostled for top spot as the personality driving the most online interest in the case for leaving the EU; in recent days, all three have faded from the digital campaign.
- Cameron, by contrast, has been a far more dominant figure throughout the Remain campaign than any of the leading Brexiteers have been for Leave. Labour leader Jeremy Corbyn was absent from the campaign for much of its opening six weeks; a more concerted effort to raise his campaign profile since then has been, on the whole, underwhelming.
- A week ago the heavy campaigning burden placed on the PM’s shoulders appeared to be a weakness for Remain, amid signs the Out camp’s Dodgy Dave strategy was landing a blow; over the contest’s final days, especially as Cameron has found his voice in the wake of Jo Cox’s murder, it has been a source of significant strength. Cameron has finished strong.
- Leaving aside Corbyn and his “Labour case for staying,” the Remain campaign has benefited from its united messaging front. Cameron embodied that unity and Remain has reaped the dividends in the digital arena, where they’ve been able to show continuity in their messaging — an obvious strength in a time of widespread confusion among the electorate, especially in the campaign’s frenzied final days.
- That said, today’s outcome will give us more clarity on which approach has worked best: the single-person focus of the In camp, or the sprawling, squabbling campaign family of Out.
SHORT-TERM MARKET IMPACT
- Given how the FX and equity markets have reacted to the shreds of polling evidence supporting a swing back towards the In camp this week, it seems fair to expect a Remain vote today to provoke a further rally in the pound and across UK and European equities.
- However, the certainty of continuing division within the UK post-referendum cautions us against assuming that risk-off assets such as gold will fall in the aftermath of the vote, even should the numbers break for Remain. Analysis we performed earlier this week shows that any increase in the volatility/intensity of discussion of either side of the Brexit debate — whether pro-Remain or pro-Leave — triggers a flight to quality (and to gold especially).
LONGER-TERM REPERCUSSIONS FOR BRITAIN
- A Remain victory will not make the uncertainty of the last two months disappear overnight. The governing Conservative Party will face a difficult process of internal reconciliation after the bruising “blue-on-blue” dramas of the campaign. David Cameron’s authority and continuation as PM will remain up for debate. And the bigger questions around the viability of the United Kingdom as a sovereign bundle of nationalities with strikingly different perspectives on Europe will endure — especially if Scotland, as expected, heavily backs Remain.
- Even if Remain triumphs, Cameron — or whoever his successor is, should he depart No. 10 Downing Street — will be closely scrutinized in the months to come as he attempts to implement the February deal struck with Brussels on new terms for the UK’s membership of the EU. Any deviation from the terms agreed in that deal will undoubtedly provoke a vicious response from the leading Brexiteers.
- Regardless of who wins, today’s outcome will not be the end of the conversation within Britain on what the country’s relationship to the EU should resemble, but the beginning of a new chapter in that conversation.
The Predata Brexit digital campaign score is generated by computing the daily, month-long correlations of Predata’s Britain In and Britain Out signals to the overall Brexit signal (from today back to the February 20 announcement of the referendum date). The score is not a prediction or a probability level of Britain voting to stay in or leave the EU; it is a measure of each campaign’s correlation to online interest in Brexit as a whole, which can be used as a rough guide to which side is dominating, from day to day, the digital campaign. As such, the scores together do not need to sum to 100%.
For more information on our Brexit signals and analysis, contact Aaron Timms at email@example.com.