Now we are out – what next?
AS the country wakes up to the news that we have voted out of the European Union, the inevitable question is ‘what next?’
Overnight, as the first results came in, the pound dropped to its lowest level against the US dollar since 1985. It hit a low of $1.33 – a fall of more than 10% – and as of 06.30 stood at $1.34.
Simon Derrick, of BNY Mellon, said: “Self evidently a number of investors will have found themselves on the wrong side of the price action in the past few hours.
“It therefore look very likely that today will see a record fall for the pound, easily beating Black Wednesday’s move. Indeed, it seems fair to say that today will soon start to be referred to as a Black Friday for markets.”
Leave.EU co founder and co chairman Richard Tice, said: “When looking for reasons the pound has dropped after we voted to leave the European Union we need look no further than number 10 and 11 Downing Street and their complicit international institutions.
“Their scare stories weren’t enough to panic the British public into voting remain but they most certainly have been enough to concern investors unnecessarily in the short term.
“The UK Is a strong economy with fantastic hard working peopele and we can continue to go from strength to strength.
“This will flow through into the markets in due course, sooner than the scare stories would have you believe.”
Stock markets, which open at 7.00am are also expected to react badly.
Political next steps will see a statement from David Cameron – whose future as Prime Minister now becomes uncertain – with a statement to Parliament on Monday, or earlier if MPs demand a special sitting.
Mr Cameron will activate Article 50 of the 2009 Lisbon Treaty – which could be as soon as within the next two weeks – setting in motion the process of withdrawing from the European Union.
Leaving, however, will still be a long process of negtiation of up to two years.
Anton Boerner, head of Germany’s foreign trade association, said: “That is a catastrophic result for Britain and also for Europe and Germany, especially the German economy. It is disturbing that the oldest democracy in the world turns its back on us.”
Wider ramifications are that the UKs decision to leave sparks a chain of referenda across the EU – Geert Wilders, leader of the Dutch Freedom Party leader wants the result to spark a Dutch vote.
But as Dr Kathryn Simpson, lecturer in politics at The University of Manchester, said: “What is important to note with regards to the vote to Leave in the EU referendum is that it isn’t a resolution, it’s the beginning of many big questions for the government both domestically and internationally.”