Markets panic as Brexit vote looms

The once remote prospect that Britain might leave the EU has sparked a wave of uncertainty on financial markets around the world and triggered a huge sell off of shares. Photo / AP

Global stock markets have plunged amid fears the UK could vote to leave the European Union in a crucial referendum after polls showed the "Brexit" camp surging ahead.

On Tuesday a poll by YouGov and UK Newspaper The Times showed the leave camp held 46 per cent of the vote compared to 39 per cent of the UK who wanted to remain in the EU.

It's a three point swing from the previous week and is the strongest indicator yet the country will vote to split ways with the 27 other members of the bloc on June 23. Eleven per cent of voters remain undecided.

The numbers indicate a late surge for Vote Leave led by former London mayor Boris Johnson and Justice Secretary Micheal Gove which has been trailing in the polls for much of the campaign.

The news came on the same day as UK tabloid The Sun became the first major daily to declare support for a Brexit with a front-page editorial urging readers to "BeLeave in Britain".

"We must set ourselves free from dictatorial Brussels," the paper said in a move that was no surprise to readers. "It is our last chance. Because, be in no doubt, our future looks far bleaker if we stay in."

The once remote prospect that Britain might actually leave the EU has sparked a wave of uncertainty on financial markets around the world and triggered a huge sell off of shares.

Overnight on Monday, the New Zealand dollar popped above 50p on concern the UK may vote to leave the European Union. The kiwi hit 50.08p, its highest level since April last year.

Two women in opposing costumes at Ascot Racecourse. Photo / Getty

Australian dollar dropped to 73 cents against the US dollar and the sharemarket fell to a seven week-low with $27 billion wiped from its value.

The UK pound is also hovering at two-month lows against the US dollar with $140 billion wiped off the UK FTSE index over three days.

Briefing.com's Patrick O'Hare said "risk aversion is the order of the day" as the US was expected to hold off raising interest rates until the UK decision late next week.

'DESTRUCTION OF WESTERN POLITICAL CIVILISATION'

The market uncertainty follows European Council president Donald Tusk's warning that a vote to leave could trigger the end of "Western political civilisation" by undermining the basis of European integration.

"As a historian I fear Brexit could be the beginning of the destruction of not only the EU but also Western political civilisation in its entirety," he told the German newspaper Bild.
"Every family knows that a divorce is traumatic for everyone ... Everyone in the EU, but especially the Brits themselves, would lose out economically."

Mr Tusk's comments are one of the latest warnings in an increasingly hysterical campaign that has seen voters bombarded from both sides.

The remain camp, led by UK Prime Minister David Cameron and Chancellor George Osbourne has focused on the economy as a key sticking point to persuade people to stay part of the 28-member bloc that is made up of 500 million people, claiming it provides better opportunities for businesses and consumers as well as security for member states.

UK Independence Party (UKIP) party leader Nigel Farage. Photo / AP

Meanwhile the leave camp say Britain would have greater control of migration and be free of bureaucratic red-tape if the country went it alone.

Both sides have been accused of scaremongering in a national debate that has prompted speculation on everything from how a vote to leave would affect travel visas to mobile phone fees, the price of houses and rights for gay and disabled people.

It's also led to several interventions from high profile figures from President Barack Obama to German Chancellor Angela Merkel as well as warnings from major financial institutions and central bankers around the world who don't want to see the break up of global bodies.

Cambridge Professor Chris Bickerton, who backs leaving and has recently published a citizen's guide to the EU said both sides were now throwing everything at the debate based on the issues polls told them voters cared about most.

"This is it," he said. "There is nothing being kept on the back burner. It will only go more in the same direction. There is quite a lot of resistance on both sides to accepting that a more nuanced argument can be made either way."

He thinks the anti-EU movement is part of a wider trend around the world that has seen people grow angry about the remoteness of politicians.

Tthe upcoming EU referendum is scheduled for June 23rd. Photo / Getty

"It's not so much what the laws are as who is making them that is the concern," he said.

However despite the polls showing leave group in front, there is still uncertainty given the inaccuracy of polling leading up to the Scottish referendum and UK general election in May 2015 which both showed much stronger results than predicted.

If a vote for Brexit does occur, the UK would invoke article 50 of the Lisbon Treaty beginning a two-year negotiation period on the terms of leaving.

During this Britain would be locked out of any further decision making and exit terms would be approved by the remaining 27 members. After that, fresh negotiations would begin on new trade deals with remaining members.

Prof Bickerton said the UK decision would be watched closely by others inside the EU where countries from the Netherlands to Austria and France have seen a rise in populist politics as voters grow disillusioned with Brussels.

"If the UK leaves everyone will be asking who is next," he told Time. "This referendum is not some uniquely and quixotic British affair - it is the tip of an iceberg and the iceberg is growing sentiment that the EU is not doing its job and people are unhappy with it."

Commonwealth citizens living in the UK are eligible to vote in the EU referendum on June 23.