Prospects for world stock markets and the global economy have perhaps never rested so heavily on a single vote in a single country as they do this week ahead of the historic referendum taking place in the U.K. on Thursday to decide whether Britain remains in the European Union.
Stock markets have reacted strongly in the past few weeks depending on which way British polls happen to be pointing. Shares fell and bond yields hit record lows last week when polls showed the leave vote gaining strength. On Monday, U.S. stocks leaped, and European shares surged even more, as three more polls showed the stay vote regaining a slim lead.
Speaking over the weekend, U.K. Prime Minister David Cameron said that a vote to leave the EU would create "debilitating uncertainty" for up to a decade and that there would be "no turning back" for the U.K., which would be left "permanently poorer."
It's not just the effect on U.K. growth that has spooked international markets. It's the possible spillover effects for the rest of Europe, and with it the global economy. A leave victory would mark a symbolic change of direction to the post-World War II status quo of ever-increasing collaboration in Europe. Similar movements exist across Europe, including within major economies like Germany, France and Italy. It's feared that if the EU's second biggest economy voted to leave next week, that others may follow, and the European Union could collapse.
At a time when global growth is anemic and monetary policy is already at the extremes of accommodation, there are fears that the European economy could be pushed into recession by a British exit, and perhaps the global economy, too.