T H E W O R L D ’ S F I N E S T B O O K M A K E R : TA K I N G B E T S S I N C E 1 8 8 2
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Billions have been made out of Brexit betting, but the fun is not over yet, says Harry Cole HE POUND WILL GO WHERE it will over the short term,” Boris Johnson told me a couple of days before Britain voted to leave the European Union in June 2016. The warning lights were there: every poll that showed his Brexit campaign edging ahead of Remain saw sterling nudge further south. “It is becoming extremely worrying for the financial markets, and we expect more losses if polls continue to indicate a Brexit lead,” brokers FXTM said that day. For some people, however, these were not warning lights but proof their plan would work. The story goes, as alleged by a Bloomberg report, some of those with pound signs in their eyes were Leave supporters. At the time sterling was trading at $1.44. A few weeks later, on the day after the historic vote, it was down to $1.33. It was the pound’s biggest crash since 2008, leaving it at its lowest price against the dollar since 1985. That doom was forecast throughout the referendum campaign – not least by the Treasury – but what took everyone by surprise was that sterling’s first reaction to
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the polls closing was to rise. Did it go “where it will over the short term” in those first few hours, or was it pushed? A couple of hours after polling stations shut across the country at 10pm on 23 June 2016, the pound was bouncing around $1.50. Why? Farage was not far away from cameras for most of the campaign, so it was no surprise to see the pin-striped wonder on TV screens in the minutes after the polls closed. But what he said sent shockwaves around Westminster: “It’s been an extraordinary referendum campaign, turnout looks to be exceptionally high, and it looks like Remain will edge it.” That was odd, given he had allegedly been kept abreast of private polling that showed Leave ahead – and those same polls had been shared with some of the richest (and bravest) gamblers in the country. I know at least one junior Ukip aide who made £10,000 that evening “messing around on Forex”. What came out of Farage’s mouth that evening surprised even his closest aides, and he has subsequently denied speaking to
pollsters before he said it. Unsurprisingly, a Remain win would be good news for the pound – which duly started soaring. It is worth noting that Farage’s denial only came after Bloomberg, smelling a rat, pointed out that it would technically be illegal for pollsters to share results with the “wider public” outside the firm while polls were still open. Before then, Farage and
Guessing which way the pound would ultimately go was a golden ticket for hedge funds and other speculators. those around him had been much more open about what had happened behind the scenes that night. In his Brexit bible All Out War, author Tim Shipman interviews a Ukip insider who was with Farage that night. They had “received very good information suggesting that Leave were going to win”. The aide told Shipman: “Someone I know was doing some
quite serious exit polls. They said, ‘Yeah, Leave are gonna win.’ I told Nigel. He was like, ‘Really?’ I was like, ‘Yes, we’re going to win.’” According to the insider, the work was done for “ten different financial institutions and hedge funds that wanted the best information money could buy in order to construct their trading positions”. Farage’s story is weakened by a statement to a gaggle of reporters at a Leave victory party. An hour after polls shut, he repeated his claim that Leave had lost, citing “what we have seen out and about, and what I know from some of my friends in the financial markets who have done some big polling”. Guessing which way the pound would ultimately go was a golden ticket for hedge funds and other speculators. Knowing it was also going to go up that evening would give you two bites of the cherry. Asked directly if he did it to move the markets, Farage always sticks to his denials. He told Shipman: “No, no, no, no. I wasn’t shorting it – I should have done!” And he insists the only money he made on the →