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Global markets plunge after UK votes to leave EU – live updates Global markets plunge after UK votes to leave EU – live updates
(35 minutes later)
6.27am BST
06:27
Simon Goodley
Today’s market rout is going to create money-making (and losing) opportunities.
Chris Beauchamp, chief market analyst, says:
“People might see this as an opportunity. Maybe the FTSE will be seen as a buy to some. Others will say let’s go with the flow. Things tend to get worse, rather than better, at first. It is going to be a day of crazy volumes”.
There’s also Gallows humour in the City.
One client to IG trader: “Well, that proves Trump can win, doesn’t it?”
As if we didn’t have enough to worry about....
6.19am BST
06:19
Britain faces years of unstable conditions, and recession - RLAM
The Remain side warned during the campaign that Brexit could push Britain into recession.
Piers Hillier, chief investment officer at Royal London Asset Management, believes this will now happen:
‘On the back of this morning’s result we expect the UK will fall into a recession. Unfortunately I see unstable market conditions lasting for between three and five years whilst new trade agreements are drawn up.’
‘It is our view that the UK Government will be left with no choice but to stimulate the economy through fiscal and monetary means, flooding the system with liquidity if necessary.’
6.16am BST
06:16
Simon Goodley
The City and markets are often viewed as if they are prophets who can make money out of predicting what is coming next, but it doesn’t look as though too many anticipated Brexit.
One IG trader has just told me his clients were buying sterling right up to midnight. That changed when we got the news from Sunderland, before 1am.
6.11am BST
06:11
Jill Treanor
High street banks have been in touch with their regulator at the Bank of England through the night.
One senior retail banker tells me:
“Everybody is braced for a roller coaster day”.
The BoE is expected to ensure that liquidity isn’t a problem.The banks have had a year to plan for the referendum, and have contingency plans in place.
6.09am BST
06:09
What Brexit means for you
Patrick Collinson
Holidays
Sterling’s overnight collapse to little more than €1.20 against the euro means it is now worth nearly 15% less than the €1.42 rate enjoyed by holidaymakers last summer.
In terms of spending, that means a family who last year got through £500 while on holiday will this year need to find £75 more.
As for freedom to travel, Britons will in all probability be able to enjoy visa-free travel to EU countries for the foreseeable future.
Petrol
Get ready for the cost of petrol to rise in the next few days. Crude oil is priced in dollars, and once that figure is converted into today’s lower sterling rate, the price must inevitably rise.
Before the referendum, the crude price was $50 a barrel, and petrol was retailing at 112p a litre for unleaded. This morning the price of crude has moved little - it is up to $51, but the fall in sterling means that once translated into pounds, the price is likely to head towards 120p. It may make sense to fill up this morning. Note that fuel duty is 57.95p a litre for both petrol and diesel, and remains the biggest component of the price we pay. Motorists also pay 20% VAT on fuel.
Mortgages
All eyes will be on official Bank of England movements, with governor Mark Carney expected to speak after David Cameron sometime after 6am.
A hike in interest rates to defend the pound will hit millions of households on tracker-style mortgages. For example, around 700,000 people are on Nationwide’s 2.5% standard variable rate. If base rate goes up by 0.5%, it will take the cost of a £100,000 mortgage to £474 from £449.
But it is just as possible that interest rates could fall to provide liquidity and restore order to markets. A cut to zero from 0.5% would see repayments fall to £436 a month.
Each half-point change in rates adds or subtracts around £25 a month to most people’s repayment mortgages. People with interest-only mortgages see steeper changes - around £42 extra a month for every 0.5% rate rise.
6.07am BST
06:07
The pound has slumped by over 6% against the euro, to €1.22, in a wave of selling. It was worth €1.30 yesterday.
That means one euro is worth 81.5p, up from 76p on Thursday.
Trevor Charsley at AFEX, a foreign exchange firm, says:
What we’re seeing now is the market reacting with complete shock and bewilderment as the results unfold.
6.05am BST
06:05
Here’s our latest news story about the unfolding panic in world financial markets.
Related: Pound slumps to 31-year low after Brexit vote
6.03am BST
06:03
Global bank HSBC has predicted that the pound will fall to $1.20 by the end of the year.
"This is a seismic and largely unexpected event which is likely to have a massive impact on financial markets" say HSBC analysts
6.00am BST
06:00
Simon Goodley
There’s a real sense of shock on the IG trading floor this morning.
A trader here tells me:
“A lot of people are long equities [they have been betting on shares rising] which is fairly natural. There is going to be a lot of pain here.”
IG is calling the FTSE 100 to open down by around 7%. There has also been a flight to safety, with gold up 5%. Bitcoin is soaring too.
And Boris Johnson is now even money on Betfair to be next PM.
5.57am BST
05:57
London stock market to plunge this morning
Britain’s stock market is going to suffer a huge selloff when trading begins in two hours time.
The futures market is indicating that the FTSE 100 index of blue-chip shares will plunge by over 554 points, or nearly 9%.
That would wipe almost £150bn off the Footsie, which contains many of Britain’s largest companies - and major international firms too.
European stock markets are also expected to suffer massive losses too, and Wall Street will surely follow suit when New York wakes up.
5.51am BST5.51am BST
05:5105:51
We’re expecting to hear from Bank of England governor Mark Carney this morning, once prime minister David Cameron has responded to the referendum result.We’re expecting to hear from Bank of England governor Mark Carney this morning, once prime minister David Cameron has responded to the referendum result.
Bank of England staffers heading to desks as contingency planning kicks in. Full weekend at work for central bankers - first since crisis?Bank of England staffers heading to desks as contingency planning kicks in. Full weekend at work for central bankers - first since crisis?
5.49am BST5.49am BST
05:4905:49
Japan's finance minister 'very concerned'Japan's finance minister 'very concerned'
Justin McCurryJustin McCurry
Japan’s finance minister, Taro Aso has said he is “very concerned about the world economy” after Japan and other Asian markets suffered a day of turmoil in reaction to the Brexit vote.Japan’s finance minister, Taro Aso has said he is “very concerned about the world economy” after Japan and other Asian markets suffered a day of turmoil in reaction to the Brexit vote.
Aso declined to say if financial authorities would intervene in currency markets after the dollar and pound plummeted against the yen, and the Nikkei 225 benchmark index shed more than 7% by early afternoon local time.Aso declined to say if financial authorities would intervene in currency markets after the dollar and pound plummeted against the yen, and the Nikkei 225 benchmark index shed more than 7% by early afternoon local time.
Trading in Nikkei futures was briefly halted as global equity markets plunged on rising fears that Britain would leave the EU.Trading in Nikkei futures was briefly halted as global equity markets plunged on rising fears that Britain would leave the EU.
5.49am BST5.49am BST
05:4905:49
Asian stock markets have already been routed, as traders watched events unfold in Britain with mounting panic.Asian stock markets have already been routed, as traders watched events unfold in Britain with mounting panic.
Japan’s Nikkei has slumped by 7.6%, or around 1,200 points, in the biggest one-day rout since March 2011 (when the Fukushima earthquake struck).Japan’s Nikkei has slumped by 7.6%, or around 1,200 points, in the biggest one-day rout since March 2011 (when the Fukushima earthquake struck).
Other markets are also deep in the red.Other markets are also deep in the red.
5.45am BST5.45am BST
05:4505:45
Jill TreanorJill Treanor
Nick Robinson, co-founder of World First, has seen a few currency moves in his time, And he reckons the slump in the pound is huge.Nick Robinson, co-founder of World First, has seen a few currency moves in his time, And he reckons the slump in the pound is huge.
“This is a major economic event and I don’t think the world has woken up to what the potential consequences might be”.“This is a major economic event and I don’t think the world has woken up to what the potential consequences might be”.
He acknowledges no one really knows those consequences but points to the possible impact on Europe and global confidence.He acknowledges no one really knows those consequences but points to the possible impact on Europe and global confidence.
Separately I’m hearing that across the City there has been 30 times the average daily volume in dollar/sterling - and that is before London properly wakes upSeparately I’m hearing that across the City there has been 30 times the average daily volume in dollar/sterling - and that is before London properly wakes up
5.43am BST5.43am BST
05:4305:43
Jill TreanorJill Treanor
The sun is rising over the City and the dealing floor is filling up at World First, where dealers are scrutinising screens and trying to come to terms with Brexit.The sun is rising over the City and the dealing floor is filling up at World First, where dealers are scrutinising screens and trying to come to terms with Brexit.
It is getting louder too.It is getting louder too.
Sterling is at $1.3460 - “stable” in the minds of one of the dealers here, despite the fact it has plummeted from $1.50 since the polls closed. It all about getting ready for clients who want to trade. There is also some humour: even the Zimbabwean dollar is up against the pound.Sterling is at $1.3460 - “stable” in the minds of one of the dealers here, despite the fact it has plummeted from $1.50 since the polls closed. It all about getting ready for clients who want to trade. There is also some humour: even the Zimbabwean dollar is up against the pound.
Another trader remarks he wasn’t born the last time the pound - at 31 year lows - traded at these levels.Another trader remarks he wasn’t born the last time the pound - at 31 year lows - traded at these levels.
5.42am BST5.42am BST
05:4205:42
Sterling suffers biggest fall in historySterling suffers biggest fall in history
A huge wave of selling has driven the pound down to its lowest level since 1985.A huge wave of selling has driven the pound down to its lowest level since 1985.
Sterling has slumped by 15 cents, or more than 10%, to $1.33 against the US dollar. An astonishing slump.Sterling has slumped by 15 cents, or more than 10%, to $1.33 against the US dollar. An astonishing slump.
The crash began in the early hours of this morning, once referendum results showed that Leave were winning more votes than the City had expected.The crash began in the early hours of this morning, once referendum results showed that Leave were winning more votes than the City had expected.
This is the biggest one-day plunge ever. It even dwarfs the sterling crash on Black Wednesday in 1992, when Britain left the ERM.This is the biggest one-day plunge ever. It even dwarfs the sterling crash on Black Wednesday in 1992, when Britain left the ERM.
5.30am BST5.30am BST
05:3005:30
Introduction: World markets hit by Brexit shockIntroduction: World markets hit by Brexit shock
Good morning.Good morning.
Financial markets around the globe are plunging after the British people rocked Europe by voting to leave the European Union.Financial markets around the globe are plunging after the British people rocked Europe by voting to leave the European Union.
After a night of wild drama, the Out campaign appears to have secured a decisive victory in the EU referendum. With most areas declared, Leave have around 52% of the vote, sending Britain into political uncertainty and the EU into its biggest crisis ever.After a night of wild drama, the Out campaign appears to have secured a decisive victory in the EU referendum. With most areas declared, Leave have around 52% of the vote, sending Britain into political uncertainty and the EU into its biggest crisis ever.
Related: EU referendum results: Britain votes for Brexit – live updatesRelated: EU referendum results: Britain votes for Brexit – live updates
The pound has already plunged to a 30-year low.The pound has already plunged to a 30-year low.
And London’s stock market is expected to tumble very, very sharply at 8am when trading begins.And London’s stock market is expected to tumble very, very sharply at 8am when trading begins.
We’ll be tracking all the financial action, on what could be one of the most dramatic days in the City in decades.We’ll be tracking all the financial action, on what could be one of the most dramatic days in the City in decades.
UpdatedUpdated
at 5.32am BSTat 5.32am BST