Cameron Falls on His Sword as Britain Stuns World, Leaves EU

Uncertainty as Nicola Sturgeon considers fresh referendum for Scotland to exit UK $2 trillion wiped off equity bourses globally Labour leader, Corbyn faces no-confidence vote Pounds plunges to 30 year low, BoE Gov. Mark Carney vows to take all neccesary m

British voters took an unprecedented step to defy their leaders and international allies by cutting ties with the European Union in a stunning result yesterday that threw financial markets around the world into chaos, forced Britain’s prime minister to resign and unleashed a new independence quest by Scotland.

As Britain absorbed the earth-shaking news, the political fallout reached to the highest level with Prime Minister David Cameron saying he would step down after championing the campaign to remain in the European Union.

Just hours later, the leader in heavily pro-E.U. Scotland, Nicola Sturgeon, said she would push for their own refer- endum to break with England and the other two partners in the United Kingdom, Wales and Northern Ireland.

A second independence referendum, following a defeated vote in 2014, is “highly likely,” said Sturgeon, the Scottish first minister. Calls to break away were echoed by nationalists in Northern Ireland.

In an emotional address outside 10 Downing Street yesterday, Cameron said the country now deserved “fresh leadership” in the face of the rejection in Thursday’s referendum. Cameron, who enjoys a close relationship with President Obama, said he hoped a new prime minister could be in place by October.

The decision effectively delays the start of divorce proceedings with Britain’s 27

other E.U. partners. Cameron said that only after the transition in leadership would the country begin the formal process of withdrawing from the European Union – popularly known as Brexit – which is supposed to take two years once it officially begins.

But even as the steps for a British departure were put on hold, immediate shock waves resonated in all directions.

The British pound plummeted to its lowest level against the dollar since 1985, and stock markets dropped sharply around the world.

The market gyrations prompted Bank of England Governor Mark Carney to try to calm investors with a statement asserting that the bank was “well prepared” for the referendum’s outcome. The central bank, Carney said, was ready to intervene to prop up the economy

In his comments, Cameron also sought to offer reassurances to jittery markets, calling Britain’s economy “fundamentally sound” and saying there would be no immediate changes in the status of immigrants in the country.

“I will do everything I can as prime minister to steady the ship over the coming weeks and months. But I do not think it would be right for me to try to be the captain that steers our country to its next destination,” he said with his wife, Samantha, standing at his side.

After his announcement, Cameron was driven to Buckingham Palace for an audience with the queen.

Cameron’s decision to step down injects immediate internal political tormoil into a moment that was already riddled with uncertainties and upheaval.

It set off an instant contest to replace him, with former London Mayor Boris Johnson – a leading campaigner in the anti-E.U. campaign – considered the odds-on favourite.

An uncharacteristically serious and even somber Johnson told reporters he was “sad” about Cameron’s resignation. He described Cameron, a longtime friend and rival, as “one of the most extraordinary politicians of our age.”

The mop-haired Johnson did not say whether he would seek Cameron’s job. He did praise voters for rejecting the European Union, which he described as “a noble idea for its time” but one that “is no longer right for this country.”

Cameron’s successor will not be picked by the general public, but instead in an internal process by his Conservative Party.

It is highly likely that whoever is picked will be further to the political right than Cameron. Since coming to office in 2010, Cameron had sought to move his party toward the political center, championing gay marriage and taking a softer line on immigration than some in the party had sought. But his repudiation over the European Union – fueled by an anti-immigration backlash – will likely leave the party’s right-wing ascendant.

Jeremy Corbyn faces leadership challenge as Labour MPs call for resignation

'Our main striker often wasn’t on the pitch, and when he was, he failed to put the ball into the net,' Chuka Umunna says of leader

Jeremy Corbyn will face his most serious leadership challenge to date next week, as Labour MPs consider a motion of no confidence amid a growing backlash over his handling of party’s EU campaign. Dame Margaret Hodge, who along with MP Ann Coffey has submitted the motion to Parliamentary Labour Party chairman, John Cryer, said that Mr Corbyn had “failed” a “test of leadership”. A former Labour minister told The Independent that Labour needed a new leader to “steer a path between market ideology on the one hand and fantasy on the other”, while senior MP Chuka Umunna criticised Mr Corbyn’s leadership during the EU campaign, telling the i newspaper: “Our main striker often wasn’t on the pitch, and when he was, he failed to put the ball into the net.”

The vote result will rattle officials in Washington. Obama had made a high-profile plea for Britain to stay. He was briefed on the results of the referendum, the White House said, and was expected to speak to Cameron in the next day.

Obama reacts...

In his reaction, US President Barack Obama declared: “The people of the United Kingdom have spoken, and we respect their decision. The special relationship between the United States and the United Kingdom is enduring, and the United Kingdom’s membership in NATO remains a vital cornerstone of U.S. foreign, security, and economic policy. So too is our relationship with the European Union, which has done so much to promote stability, stimulate economic growth, and foster the spread of democratic values and ideals across the continent and beyond.

“The United Kingdom and the European Union will remain indispensable partners of the United States even as they begin negotiating their ongoing relationship to ensure continued stability, security, and prosperity for Europe, Great Britain and Northern Ireland, and the world.”

Presumptive Republican nominee Donald Trump, who was in Scotland yesterday to open a golf course, backed Brexit.

Asked by reporters about the vote as he toured his course to the tune of bag pipes, Trump called it “a great thing.”

“They took back their country,” said Trump, who sported a white “Make America Great Again” cap. “That’s a great thing.”

For months, Britain’s political and economic elite had looked on with growing apprehension as the country flirted with a choice that experts had warned could lead to global recession and a rip in the Western alliance.

But most predicted this pragmatically minded country would ultimately side with keeping Britain in an organization regarded as a pillar of the global economic and political order.

Instead, a majority of British voters heeded the call of proBrexit campaigners to liberate the nation from what many here regard as an oppressive Brussels bureaucracy that enables mass migration into the country.

“Leave” won by more than a million votes — out of some 33 million cast, or nearly three-quarters of eligible voters. In percentage terms, the 52-48 pro-Brexit split was the inverse of what final opinion polls had predicted.

The outcome revealed vast divides – with massive victory margins for “remain” in thriving metropolitan centers such as London and equally resounding victories for “leave” in small towns, rural areas and struggling, post-industrial cities.

The vote split the country along essential lines: Old versus young. Provincial versus metropolitan. Scotland versus England. Native-born Britons versus immigrants.

Those divisions may only be hardened by Thursday’s result and could be heightened further if an avowed Euroskeptic comes to office at 10 Downing Street.

During months of campaigning, pro-Brexit leaders unleashed fevered attacks on Brussels, but they offered no common, detailed vision of how the country could succeed outside the bloc.

But Johnson said that whatever the outcome, Britain would not turn inward.

“We cannot turn our backs on Europe. Britain will continue to be a great European power. We are part of Europe,” he said.

Dow briefly drops 500 points, S&P worst open since 1986…

U.S. stocks traded sharply lower yesterday, reversing recent gains in a global risk-off trade after Britain surprised markets by voting to leave the European Union.

The Dow Jones industrial average briefly fell more than 500 points in morning trade, with Goldman Sachs contributing the most to declines as nearly all constituents traded lower. Verizon was the only positive component.

The S&P 500 extended opening losses to decline more than 2.5 percent lower in morning trade. Financials fell more than 4 percent to lead all 10 sectors lower.

The S&P 500 opened 1.88 percent lower in 1986, according to Howard Silverblatt of S&P Dow Jones Indices.

The Dow Jones industrial average fell 2.57 percent, at 17,547.44, while the S&P 500 lost 2.7 per cent just as the Nasdaq Composite went down by 3.12 per cent. The MSCI's all-country world stock index MIWD00000PUS fell 3.8 per cent.

$2 trillion wiped off equity bourses globally….

The shock waves of Britain's decision to leave the European Union, sent global stocks markets tumbling. An estimated $2 trillion was wiped off equity bourses globally, just the Sterling plunged to a 31-year low.

From developed to emerging markets in Europe, United States, Asia to the emerging markets and frontier markets in Africa, stocks closed yesterday lower as investors reacted negatively to the Brexit.

In Asia, China stocks fell more than one per cent with the Shanghai Composite Index and Blue Chip CS1300 shedding 1.3 per cent apiece. But the reaction from Chinese investors was relatively subdued, with some investors apparently taking advantage of the panic for bargain hunting.

Shenzhen's start-up board ChiNext slumped over 3 per cent but ended the session roughly flat.

"The mainland market is less sensitive (to Brexit)," said Charles Wang, chairman of Appleridge Capital Management Co.

But he added the Chinese market could still suffer from high volatility over the next few weeks.

ANZ said in a research note that although the Brexit result is unlikely to affect China's immediate economic outlook, the event "reminds us that we are still pencilling in one more additional RRR cut," referring to banks' reserve requirement ratio.

In Japan, the Nikkei 225 Index dipped 7.9 per cent, closing below 15,000 for the first time in more than four months. That’s the steepest drop in more than 16 years.

Meanwhile, the yen surged, briefly trading below 100 yen to the dollar for the first time since November 2013. That represents another setback for “Abenomics,” which depends in part on a weak yen to boost exports and encourage domestic consumption.

Prime Minister Shinzo Abe said he would take steps to stabilize the markets and scheduled a meeting of his Cabinet for late Friday.

Finance Minister Taro Aso said Japan would consider “currency swaps” as a way to stabilize the yen, and Bank of Japan Gov. Haruhiko Kuroda said he would work with overseas central banks, as well, according to Japan’s Kyodo News service.

The JSE of South Africa, which is the largest market in Africa suffered its biggest daily fall this year as a result of the Brexit vote. The JSE All-Share Index fell 3.56 per cent. Similarly, the JSE blue-chip top 40 index lost 3.97 per ccent. Financials dropped 4.78 per cent and banks were 3.72 per cent lower. General retailers dropped 3.63 per cent and industrials shed 3.41 per cent.

In Nigeria, the Nigerian Stock Exchange All-Share Index fell 1.36 per cent to halt a bullish run as investors took profit following the Brexit victory.

The Nigerian equities market has enjoyed an unprecedented rally on hew back of the new forex policy before the Brexit vote.

Speaking on the Brexit victory, Dominick Chirichella, senior partner at the Energy Management Institute in New York, said: "This is an historic event and will not be swept under the rug very quickly. That said, markets will not remain in turmoil as they are at the moment for an extended period of time. There is no indication that the global financial markets are anywhere near a meltdown as we saw in 2008. The UK will not collapse and the EU will not collapse anytime soon.

Merkel warns EU against kneejerk reaction to Brexit

Meanwhile, German Chancellor Angela Merkel yesterday warned EU member states against drawing hasty conclusions about Britain's decision to quit the bloc, as that risked further splitting Europe. We take note of the British people's decision with regret. There is no doubt that this is a blow to Europe and to the European unification process.

“But what the consequences of this would be... would depend on whether we -- the other 27 member states of the EU -- prove to be willing and able to not draw quick and simple conclusions from the referendum in Great Britain, which would only further divide Europe," said Merkel.

Member states should "calmly and prudently analyse and evaluate the situation, before making the right decisions together," said Merkel, who will host talks with French President Francois Hollande, Italian Prime Minister Matteo Renzi and European Council president Donald Tusk in Berlin on Monday.

Buhari commends Cameron's statesmanship…

In a related development, President Muhammadu Buhari yesterday expressed regret at the resignation of British Prime Minister David Cameron.

The president said Nigeria had enjoyed remarkable goodwill, support and understanding under the capable leadership of the outgoing Prime Minister over the years.

The president said Cameron’s resignation in response to the outcome of a referendum that supported Britain to leave the European Union “was a demonstration of courage by a democratic leader who respects the will of the people, even if he didn’t agree with their decision.”

Buhari noted that by ‘‘putting the will of the people before his political future, the Prime Minister proved himself to be a selfless leader with respect for democracy and voters' sovereignty.’’