The United Kingdom has voted to leave the European Union, resulting in Sterling falling to the lowest level against the US dollar in 30 years.
In the EU referendum on 23 June 2016, UK voters voted 51.9% in favour of leaving against 48.1% to remain in the Union. The result ends Britain’s 43 year membership of the EU.
The pound initially dropped to $1.3224 on Friday, down from $1.5018 when exit polls were released.
Nigel Farage MEP, leader of the United Kingdom Independent Party, said: “The sun has risen on an independent United Kingdom. It is a victory against the big merchant banks. Against big business. The EU is failing. The EU is dying.
“17 million people have said we must leave the European Union. We now need a Brexit government.”
The Bank of England released a statement just before 7am noting that it is monitoring developments closely.
It stated: “It has undertaken extensive contingency planning and is working closely with HM Treasury, other domestic authorities and overseas central banks.
“The Bank of England will take all necessary steps to meet its reponsibilities for monetary and financial stability.”
The FTSE 100 is predicted to fall by up to 10 per cent in today’s trading, which would represent one of the worst falls in history.
UK ratings agency Standard & Poor’s issued a statement warning that the UK is likely to lose its AAA credit rating as a result of the result.
Saker Nusseibeh, chief executive of Hermes Investment Management, said the UK now faces the prospect of a recesssion.
He said: “Besides a sharp sell-off in risk and in sterling, as well as a recession in the UK (which is expected) our fear is that this may trigger political uncertainty within Europe which in turn may lead to a severe global market correction.”
Piers Hillier, chief investment officer at Royal London Asset Management, said: “On the back of this morning’s result we expect the UK will fall into a recession. Unfortunately I see unstable market conditions lasting for between three and five years whilst new trade agreements are drawn up.”