Article / 24 June 2016 at 9:30 GMT

How did this just happen?

First in Business Worldwide. /
  • Leave vote shocks world, market
  • Bookmakers' odds got it wrong
  • Cosmopolitan London 'a bubble'

Upside down: Britain's vote to leave the EU has shocked the world. Photo: iStock


The UK's shock vote to leave the European Union has stunned the world.

Late last night, even Nigel Farage, one of the most prominent leave campaigners and leader of the UK Independence Party, said that he thought Remain would edge it.

So how did this surprise result happen and what might happen next?

The betting markets were misinterpreted

One of the biggest reasons that traders were complacent about the possibility of a Leave vote was that the betting markets, which are often believed to be more reliable than polling, suggested Remain would carry the day.

Pippa Malmgrem, the author and economist, argued that these results were skewed by those betting on Remain placing larger bets.

The Labour Party lost the working classes

The geographic split of the leave versus remain vote shows a strong euroskeptic vote in parts of the U.K. which were once strong Labour heartlands, before the opposition party started losing ground to the U.K. Independence Party. Jeremy Corbyn, the Labour Party leader, who has expressed ambivalent views about the EU in the past, was not seen as a particularly strong voice for the Remain campaign.

The polls were misinterpreted

After failing to predict the Conservative Party's victory in last year's general election, the UK's pollsters were under pressure. Even though polls regularly suggested that the vote might swing to leave, traders followed the betting instead.

The City got it wrong

Never has it been more evident what a bubble London exists in. The international flavor of the country's capital, and particularly the moneyed elite who work in its financial centre, meant that many were ignorant, or just dismissive, of the concerns of those outside the city.

The government got it wrong

This referendum was called by UK prime minister David Cameron because of a promise made in his election campaign to renegotiate terms with the EU and then hold a referendum, designed to win over voters he feared would defect to UKIP.

He appears to have underestimated just how many leading figures in his own party, including long-term friends like justice secretary Michael Gove and former London mayor Boris Johnson, would join the leave campaign, and the momentum it would gather.

Matthew Goodwin, the professor of politics at the University of Kent who is the author of a book on UKIP's rise, pointed out that the elite had failed to appeal to many in UK society.

Intergenerational strife

The younger you are as a UK voter, the more likely you were to vote remain. A YouGov poll suggested 75% of 18-24 year olds voted Remain, with just 39% of those over 65 voting to stay in the EU.

Also the young are more likely to be active on social media. This is one reason why the Remain campaign may have appeared stronger than it actually was.

Early morning on Upper Street, Islington: A great many Remain voters 
overestimated popular support for their stance. Photo: iStock

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