DAVID Cameron has announced he will step down as Prime Minister by October.
Speaking just before 08.30 outside Downing Street Cameron said that while leaving Europe is not the path he would have recommended, Britain could survive outside the EU.
He said: “There can be no doubt about the result.
“I would reassure those markets and investors that Britain’s economy is fundamentally strong.”
Adding that the country’s new direction will require strong and committed leadership, he said: “I do not think it would be right for me to be the captain that steers the country to its next direction.
“We should aim to have a new Prime Minister in place by October.”
The announcment came shortly after stock market opened, showing an immediate slump as it reacted to the UK’s decision to vote to leave the European Union in a historic referendum.
The FTSE-100 was down more than 8% in the opening 10 minutes, wiping around £120bn off the value of the UK’s public companies.
At 8.10am, the FTSE-100 was down more than 500 points, to around 5,800. By 9.00 it had recovered slightly to 6,035.
The City had expected the referendum to result in a decision to stay in Europe, and today’s trading is expected to be chaotic.
Economist Bill O’Neill head of the UK investment office at UBS Wealth Management, which has an office in Manchester, said Westminster, Brussels, the Bank of England and the European Central Bank would be under immediate pressure to calm the markets.
“The markets will not wait,” he said. “They are a discounting machine and they will overreact first, think later.
“Over the next 12 months we expect sterling to fall toward 1.30 against the US dollar, gilt yields to fall back towards 1% and the FTSE100 to drop by 10% from levels before the vote.
“The euro and European equities will also come under pressure with the whole European project now under something of a cloud.
“One thing is clear today – the UK economy will be negatively impacted over the near term. The degree of harm will depend on whether the terms of exit are harmonious or acrimonious.
“A smooth transition of power is likely to see a deceleration in the economy, but falling just short of a recession. Uncertainty will remain, but be contained. Expect the second half of the year to be characterised by stagnation.
“A confrontational, vexatious transition could see the UK courting a recession in 2017. We would expect a prolonged period of uncertainty and consumers will very quickly sense the challenges out there.
“The Bank of England will be under pressure to cut interest rates and/or reintroduce quantitative easing.”
