David Cameron has announced his resignation as Prime Minister of the United Kingdom after the shock victory for the campaign to leave the European Union.
Cameron said in a statement Friday that he is likely to be gone by the time of the Conservative Party conference in October.
His statement came as stock markets around Europe saw significant falls, with early signs that this could be an event that causes a shock as deep as 1987’s Black Monday.
Mark Carney, the governor of the Bank of England, sought to calm markets Friday morning with a pledge to provide an extra £250 billion ($344 billion) in liquidity. He assured markets that U.K. banks were well-funded as their share prices tanked.
Donald Tusk, the President of the European Council, warned against”hysterical reactions”.
“Today on behalf of the 27 leaders, I can say that we are determined to keep our unity as 27. For all of us, the union is the framework for our common future,” he said in a statement.
Across Europe, markets opened deep into negative territory, with STOXX Europe 600 down 8 percent, the FTSE 100 opening down 7.83 percent, Germany’s Dax down by 8.6 percent and the CAC 40 in France down by almost the same amount. The FTSE started to pare back some losses within an hour of the market opening, and was down 4.8 percent at 0900 BST.
In London, housebuilders and banks were worst hit. The U.K.’s Lloyds Bank was off some 30 percent on the open, as were Barclays and RBS. Housebuilders Persimmon and Taylor Wimpey had around 40 percent knocked off their market value as fears about the U.K.’s economy deepened.
The leave camp secured 51.9 percent of the vote in the U.K. with 17.4 million votes, throwing markets around the world into turmoil and prompting sterling to hit its lowest level since 1985.
Markets around the world have already been roiled by the shock result:
- In Japan the Nikkei 225 closed down some 8 percent
- Sterling has fallen 7 percent against the dollar and nearly 2 percent against the euro.
- The prices of Brent and WTI have both dropped some 4 percent.
- The yield on the 10-year U.S. Treasury bond has fallen 12 percent.
- Dow futures now down 460 points
The ramifications of the result are reverberating across the U.K., European Union and the wider political and economic establishment.
Nigel Farage, the leader of the U.K. Independence Party (UKIP) who has been a prominent member of the leave campaign, claimed victory, saying June 23 would become known as the U.K.’s “Independence Day” and should be declared a national holiday. The UKIP leader also called for a “Brexit government.”
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