By Geoffrey Smith
June 23, 2016

This post was updated on Friday, 9:10 am EST to reflect the voting result.

Decades of European integration were blown up by a single vote.

The U.K.’s 46.5 million registered voters decided whether or not to leave the European Union, 43 years after the country first joined the then-European Economic Community, and the answer was yes.

A vote to “Leave” marked the first big reversal of European efforts at political and economic integration in 60 years, casting big doubts over the EU’s future direction. U.K. Prime Minister David Cameron announced his resignation. Scotland First Minister Nicola Sturgeon hinted at another referendum vote for independence from the U.K., and global markets were jolted. Experts from the Federal Reserve, the IMF, and elsewhere are afraid that could cause major volatility in financial markets, maybe causing recessions in Britain and further afield.


Why was Brexit put up for a vote?

The vote was called by Prime Minister David Cameron in order to stop his Conservative Party’s long-running internal feud over the EU, and to stop the rise of the anti-EU U.K. Independence Party (which has been challenging the Tories’ traditional dominance of the right wing of British politics). The vote was also supposed to force the EU into reforming itself into a more growth-friendly and democratically accountable entity, and secure the U.K. cast-iron guarantees that it won’t be sucked into a European superstate in future. However, Cameron’s fellow European leaders gave little of substance away in a package of reforms agreed ahead of the vote.

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When will we know who won?

The polls will close at 10 p.m. local time (5 p.m. ET). But we won’t know for hours after that. That’s because there is no official exit poll, because most exit polls are based on ‘swing’ factors from previous elections, and there is no useable precedent. The best you can do is to measure the actual result against one of these two handy rankings of the electoral districts (here and here). The first voting areas start to report at 11:30 p.m. local time (6:30 p.m. ET), but our best guess is that we won’t know which of the Brexit or Bremain camps is the victor until 5 a.m. local time (or 12:00 a.m. ET), when 80% of the votes are likely to be counted.

The official results won’t be in until 7 a.m. local time (2 a.m. ET).

How many voting areas are there in the U.K.?

Ballot boxes are sealed, collected, and transported to the count venue for each of the 382 local counting areas. These range from the Isles of Scilly, with 1,200 registered voters, to the city of Birmingham, with 700,000.

It’s important to remember that it’s not about carrying a majority of electoral districts. The districts’ counts will be aggregated into regional ones, which will be aggregated into a national one, and that’s the only number that matters.

What are some of the voting areas to look out for to tell us how the vote is going?

The first meaningful declarations will be in the north-eastern city of Sunderland and Newcastle, which are both expected to vote “Leave.” Together, those two will give a clue as to how far the industrial heartlands that traditionally vote for the left-wing Labour Party are following its advice to Remain. One interesting aside here is that Nissan’s biggest factory in Europe is in Sunderland, and is one of the biggest employers in the region. The U.K. car industry, which depends on access to the EU’s single market, is resolutely opposed to ‘Brexit’, although Nissan itself has stayed away from the industry’s collective warnings.

By 1 a.m. local time (9 p.m. ET), results will start to come in from the rest of the country. Some to watch out for include Swindon, often seen as the ‘typical’ English town, the Welsh town of Merthyr Tydfil and the Manchester borough of Salford, where clear votes to Leave could spell trouble for David Cameron.

When will votes in London and other major cities be reported?

The first results are due just after midnight. Small, concentrated districts like the Scillies and Gibraltar will report before then, as may the City of London (which has very few inhabitants because it’s all office space), but these are sideshows to the main event.

But it won’t be until after 2 a.m. (10 a.m. ET), that a slew of results from Scotland and the London boroughs come out. They should bolster the “Remain” vote. Scots are expected to vote to Remain by a margin of up to 2:1, but equally important here will be the turnout. One of the big open questions is whether the Remainers are as motivated as the Leavers. Recent polls have suggested the overall turnout could be over 80%. For Remain to have the best chance of winning, it needs a high turnout here.

After 5 a.m. (12:00 a.m. ET), The big cities of Glasgow, Manchester, Bradford and Liverpool are expected to report around this time, with around 1.4 million votes between them. Given the tendency of bigger cities to be pro-EU, these could be the last hopes of the Remain camp if it’s trailing at this point.

How will financial markets react?

The banks that have reportedly commissioned private poll analyses may already be starting to trade on what the district results are telling them. A vote to Remain is likely to strengthen the pound and stock futures, a vote to Leave will do the reverse, and will also most likely hit the euro.

What happens after the vote?

Curiously, the referendum is not legally binding (“advisory” rather than “mandatory”, as the jargon has it), and enacting a ‘Brexit’ would stick in the craw of a parliament that is pretty solidly in favor of Remain. But a vote to Leave would almost certainly force a change of leadership in the Conservative Party and a new Prime Minister, given Cameron’s leading of the Remain campaign. Whoever replaces him as head of Her Majesty’s Government would be likely to invoke Article 50 of the EU’s Treaty, under which the two sides would have an initial two years to negotiate their post-divorce relations, notably on trade and the right to free movement.

It’s likely that the U.K. would continue to be bound by European law during that period, although it could take a more aggressive stance and repeal the U.K.’s European Communities Act of 1972 immediately, but that would have extremely complex legal consequences and overshadow the separation negotiations.

Check here, for Fortune’s coverage of what happens in the Brexit vote.


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