Did Social Media Sentiment Regarding the Pound Predict Brexit?

One commentator described the Brexit process was described as entering uncharted territory over the weekend. The same could be said for gauging social media sentiment. Our friends at Social Market Analytics continue to take a look at data that may have been a predictor of an outcome that the pollsters and bookies got very wrong. I received a couple of charts this morning and one completely stands out. Below is a chart of the sentiment with respect to the British Pound versus the US Dollar leading up to, during, and after the recent election.

SMA GPB Brexit

The trend going back to early June is decisively negative for the British Pound. Even when there were times that the polls appeared to be all about ‘remain’ the sentiment remained negative and continued to trend to more negative. We are in new territory with respect to using this sort of data to predict different electoral outcomes, but it appears Social Market Analytics is on to something. I know they are already monitoring commentary with respect to the coming presidential election. It’ll be interesting to see if they outshine the professional pollsters again.