Leave the Euopean Union

24

June

2016

Global Turmoil Unleashed as UK Votes to “Brexit” the EU

And Now What Happens?

In what many see as a shock result, the British electorate cast their votes last night to ‘Brexit’ from the European Union.

World financial markets plunged as complete results showed a near 52:48 split for leaving. The outcome created the biggest global financial shock since the 2008 economic crisis, this time with interest rates around the world already at or near zero, stripping policymakers of the means to fight it.

As the market digested the official results from different UK regions throughout the Asian session last night, it became clear that the numbers were leaning in favour of the leave vote. This morning, FOREX markets are seeing extreme moves in response to the outcome.

So far this morning, the pound has suffered its biggest one-day fall in history, plunging more than 10% against the dollar to hit levels last seen in 1985, while the euro saw significant declines against the safety-linked yen and the USD.

Gold saw an extreme bounce alongside the US Treasuries, while stock futures moved sharply lower.

The chief ratings officer for Standard & Poor´s told the Financial Times Britain´s AAA credit rating was no longer tenable.

Futures trading predicted massive opening losses on share markets across Europe. Britain´s FTSE futures and Germany´s Dax futures fell about 9%. The euro zones Euro Stoxx 50 futures sank more than 11%.

Analysts predict the vote will initiate at least two years of separation proceedings with the EU and cast doubt on London’s future as a global financial capital.

“We’re in uncharted territory”, an aide working in Cameron’s office told reporters.

The Bank of England said it would take all necessary steps to secure monetary and financial stability. Global policymakers also prepared for action to stabilise markets, with Japanese Finance Minister Taro Aso promising to “respond as needed” in the currency market.

Yet there was euphoria among Britain´s eurosceptic forces, claiming a victory they styled as a protest against the political establishment, immigration, big business and foreign leaders including US President Barack Obama who had urged Britain to stay in.

“Dare to dream that the dawn is breaking on an independent United Kingdom” said Nigel Farage, leader of the eurosceptic UK Independence Party. “This will be a victory for real people, a victory for ordinary people, a victory for decent people.Let June 23 go down in our history as our independence day”.

Asked if Cameron, who called the referendum in 2013 and campaigned to stay in the bloc, should resign if Britain voted for Brexit, Farage said “Immediately”.,

The United Kingdom itself now faces a threat to its survival, as Scotland voted 62% in favour of staying in the EU and is likely to press for a new referendum on whether to become independent after its 2014 vote to stay in the UK.

Scottish First Minister Nicola Sturgeon said Thursday´s makes clear that the people of Scotland see their future as part of the European Union.