Global markets down as Britain votes to leave EU
Global markets buckled as Britain’s vote to leave the European Union drove the pound to the lowest in more than 30 years while sparking demand for haven assets from U.S. Treasuries to gold.
As markets reel from the U.K.’s surprise decision to leave the European Union, the U.S. may be one of the relatively safer ports in the global storm.
While the economic consequences of life after Brexit will take months, even years, to be fully realized, the uncertainty that has already roiled markets will probably impede business investment worldwide. The pound plunged to the lowest since 1985, global stocks tumbled and bonds and gold rallied after U.K. voters decided by a 52 percent majority in a Thursday referendum to separate from the EU.
Britain’s stunning vote to leave the European Union spread turmoil across the world’s financial markets and dismay through Europe’s capitals, where EU leaders gave an early warning that the looming divorce talks may prove bitter.
The pound plunged to the lowest since 1985, global stocks tumbled and bonds and gold rallied after U.K. voters backed Brexit by 52 percent to 48. Prime Minister David Cameron resigned after the defeat of his Remain campaign, saying he will serve a few more months before making way for a successor who’ll negotiate the details of departure.
Boris Johnson, a leading Brexiter and the early favorite to replace Cameron, also said there’s no rush to get the official separation process under way. But EU leaders signaled they have a different timetable in mind. “The U.K. will no longer be part of the EU, and the procedures dealing with its departure will be enacted quickly,” French President Francois Hollande said. In Brussels, a trio of top officials said the U.K.’s government must “give effect to this decision of the British people as soon as possible, however painful that process may be.”
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