Global financial markets plunge as Britain exits EU

Britain has voted to leave the European Union, forcing the resignation of Prime Minister David Cameron and dealing the biggest blow to the European project of greater unity since World War Two.

Global financial markets plunged as results from Thursday’s referendum showed a near 52-48 percent split for leaving.

The pound fell more than 10 percent against the dollar to levels last seen in 1985, its biggest one-day fall in history, 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.

European shares plummeted more than 8 percent, headed for their biggest ever one-day fall. Billions of dollars were wiped off European banks’ market value, with Britain’s Royal Bank of Scotland, Barclays and Lloyds Banking Group among the biggest fallers.

An emotional Cameron, who led the “Remain” campaign but lost the gamble he took when he called the referendum three years ago, said he would resign as prime minister by October.

“The British people have made the very clear decision to take a different path and as such I think the country requires fresh leadership to take it in this direction,” he said in a televised address outside his Downing Street office.

“I do not think it would be right for me to be the captain that steers our country to its next destination.”

Quitting the EU could cost Britain access to the EU’s trade barrier-free single market and mean it must seek new trade accords with countries around the world. The United Kingdom itself could break apart, with leaders in Scotland — where nearly two-thirds of voters wanted to stay in the EU — calling for a new vote on independence.

The EU for its part will be economically and politically damaged, facing the departure not only of its most free-market proponent but also a member with a U.N. Security Council veto and powerful army. In one go, the bloc will lose around a sixth of its economic output. Populist leaders in France and the Netherlands demanded their own referendums to leave.

The vote will initiate at least two years of divorce proceedings with the EU, the first exit by any member state. Cameron, who has been premier for six years, said it would be up to his successor to formally start the exit process.

His Conservative Party rival Boris Johnson, the former London mayor who became the most recognizable face of the “leave” camp, is now widely tipped to seek his job.

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Source: Reuters