Bookies’ odds hold back investor fears over Brexit

Markets can be peculiar. Investors can ignore things for a long time, then suddenly the mood can swing. Brexit has had a limited impact on markets so far, except for the foreign exchanges, where sterling has been the worst performing of the major currencies this year.

Slowly, however, you can see outbreaks of concern. On the London stockmarket on Friday, housebuilders’ shares had a sharp fall, with the likes of Berkeley Group and Taylor Wimpey losing ground, due to fears about the impact on inward investment.

UK government warnings this weekend of higher mortgage rates in the event of Brexit will add to concerns.

Up to now, investors have been reassured by the bookies. William Hill is quoting a “ remain” vote as 5/2 on, with an “ out” vote at 15/8, a convincing margin.

Against this backdrop, the low interest rate Ireland paid to raise 10-year debt this week was a good result, albeit that this market is supported by huge ECB buying. But if the markets do really start to fear a Brexit, the response will surely be more dramatic. Watch those bookies’ odds!