Global financial markets plunged on Friday as results from a referendum defied bookmakers’ odds to show a 52-48 percent victory for the campaign to leave…
The pound fell as much as 10 percent against the dollar to touch levels last seen in 1985, on fears the decision could hit investment in the world’s fifth-largest economy, threaten London’s role as a global financial capital and usher in months of political uncertainty. The euro slid 3 percent….
World stocks saw more than $2 trillion wiped off their value, with indices across Europe heading for their sharpest one-day drops ever. Britain’s big banks took a $100 billion battering, with Lloyds, Barclays and RBS falling as much as 30 percent at one point.
The United Kingdom itself could now break apart, with the leader of Scotland – where nearly two-thirds of voters wanted to stay in the EU – saying a new referendum on independence from the rest of Britain was “highly likely”.
An emotional Cameron, who led the “Remain” campaign to defeat, losing the gamble he took when he promised the referendum in 2013, said he would leave office by October.
The EU for its part will be economically and politically damaged, facing the departure of a member with its biggest financial centre, a U.N. Security Council veto, a powerful army and nuclear weapons.
German Chancellor Angela Merkel, who invited the French and Italian leaders to Berlin to discuss future steps, called it a watershed for European unification. Her foreign minister called it a sad day for Britain and Europe.
U.S. presidential candidate Donald Trump, whose own rise has been fuelled by similar anger at the political establishment, called the vote a “great thing”. Britons “took back control of their country”, he said in Scotland where he was opening a golf resort. He criticised Obama for telling Britons how to vote, and drew a comparison with his own campaign.“I see a big parallel,” he said. “People want to take their country back.”
The financial turmoil was the worst global shock since the 2008 economic crisis, and comes at a time when interest rates around the world are already at or near zero, leaving policymakers without the usual tools to respond.The body blow to global confidence could prevent the Federal Reserve from raising interest rates as planned this year, and might even provoke a new round of emergency policy easing from all major central banks, despite their limited options.