Closed Brexit live: the political and market fallout



The UK has voted to leave the EU after a bitter and divisive campaign.

Prime Minister David Cameron has said he will resign by the time of the Conservative party conference in October.

Boris Johnson has said that the British people “have spoken up for democracy”. The EU was “a noble idea for its time,” he said. “It is no longer
right for this country.”.

Financial markets across the world are down sharply. Sterling has plummeted and banking stocks are taking a heavy beating in early trading.

Bank of England govenor Mark Carney has said they “will not hesitate to take any additional measures” to ensure monetary and financial stability.

First Minister of Scotland Nicola Sturgeon has she will begin to prepare the legislation for a new vote on Scottish independence.

View the referendum night live blog

Key points

  • It is a Leave victory – see our interactive results page
  • Most of the country has turned against the EU with only London, Scotland and Northern Ireland delivering big wins for Remain.
  • Turnout was 72%, with 16,141,241 cast in favour of Remain and 17,410,742 in favour of Leave
  • Prime Minister David Cameron has said he will resign and that the new PM should be the one to decide when to trigger Article 50.
  • The financial markets are in turmoil, sterling has fallen dramatically and volatility is hitting other major currencies. The Euro is suffering its worst day ever against the dollar. Banking stocks are particularly hard hit.
  • The Bank of England has said it will “take all necessary steps to meet its responsibilities for monetary and financial stability.” Both the BoE and the ECB has said it is ready to provide additional liquidity if needed
  • Leave campaigners Boris Johnson and Michael Gove have said informal negotiations will now start on the exit.
  • Nicola Sturgeon confirms preparations for a new Scottish independence referendum

Chancellor Angela Merkel has announced that she is inviting Italian prime minister Matteo Renzi, European Council president Donald Tusk and French president Francois Hollande to a post-Brexit vote summit in Berlin on Monday, reports the FT’s Stefan Wagstyl from Berlin.

The move to expand the meeting to the EU’s three top post-Brexit leaders highlights her determination to hold the EU together despite the political and populist pressures in many of the 27 states that will remain in the union after the UK’s departure.

The three will prepare for a key European Council meeting on Wednesday.

Ms Merkel expressed her “great regret” for the UK’s decision saying: “Today is a turning point for Europe, it is also a turning point for the European unification process.”

She emphasised the need for unity but also recognised that “Europe is varied and people in Europe are also varied” including in their “expectations from the EU.”

Future initiatives must focus on “improving people’s lives”. But the EU also had to deal with the challenges of globalisation.

She said that the EU must recall its role in bringing peace to Europe. “We must never forget, especially in thiese hours, that the idea of European unity was an idea for peace.”

Frank-Walter Steinmeier, the German foreign minister, spoke of a “bitter day for Europe”.

The EU must respond, not by “falling into hysteria or shock” but to deal with citizens’ questions. “For example, common European answers to the refugee crisis, do more about employment and growth at the same time take care that the European Union also reaches common answers to the questions arising from the changed security situation.”

Another vignette from a stunned City of London, via our roving reporter Naomi Rovnick:

A commodities broker, who declined to be named, having a small beer and
a cigarette at a cafe in Broadgate Circle, said:

“This morning between 7 and 9 there was no liquidity. It was more difficult than usual to get prices, extremely hard. We saw general panic to start and now reality is returning to markets. There is now a sense of relief as people thought this morning that the FTSE would have dropped more. Now our markets have returned to normal, liquidity is coming back to the assets we trade, but all eyes are now on the US market open.”

The French are starting to talk tough on the consequences for British banks of the Brexit vote Michael Stothard reports.

Frédéric Oudéa, president of the French Banking Federation, the European Banking Federation and Societie Generale, said the vote will have “significant consequences for the city of London”.

He said banks based predominately in the UK would be most affected by the vote, which could prompt the ECB to try and drive euro trading activities – today done largely in London- back to the continent.

“The deal [between the ECB and the UK] has clearly changed now”.

He said banks moving staff to the continent will not dawdle.

“The banks that are only in the UK will not be able to wait… If they are moving 500 or 1000 people, it takes time,” he said.

French banks would be some of the least impacted by the vote because they are already in the eurozone, he said, predicting there “will not be a quick or large move” of staff out of London.

Done and dusted? Never. The result is without question, and the initial market reaction too, but there is much left to happen today before you can unglue yourselves from the screen.

Yet to come, George Osborne’s reaction. There is not a pundit out there who will predict the chancellor outlasting his boss, David Cameron. Mr Osborne’s last tweet is still, tragically pre Brexit:

The US market reaction is yet to come too, though pre-market trading suggests an opening on Wall Street down 3-4%.

We might expect more from Labour: this is as great a defeat for Labour moderates as it has been for Cameron, and some of them are after blood, as reported by Helen Lewis of the New Statesman:

Update: here is a great story from the FT’s Jim Pickard and Gonzalo Vina on the brewing rebellion against Corbyn.
There will of course be developments in the race to succeed Cameron. Boris Johnson is the favourite, but not – yet – the overwhelming one. At pixel time, Theresa May is yet to say a word. She is second favourite with the bookies.

And do not rule out more unknown unknowns, not after a day like this.

Bank of America Merrill Lynch has told staff to “avoid distraction” and focus on clients and not the bank as the shock Brexit outcome ricochets around financial markets, the FT’s investment banking correspondent Laura Noonan reports.

Laura has seen a message BAML’s EMEA president Alex Wilmot-Sitwell sent to UK staff this morning:

Wilmot-Sitwell said the merger of BofA and Merrill Lynch made him “very confident” BAML could successfully execute a plan to protect its European business before the UK’s exit of the European Union comes into effect.

“Our immediate focus however must not be on ourselves but on ensuring that we are squarely behind our clients during these unprecedented times,” he said.

“He added that the bank must “avoid distraction”. “Please make sure that our clients know that we are all committed to guiding them through the challenges ahead and that we will do everything we can to make their journey as seamless as possible,” he said.

“That means that, starting today, it is business as usual.”

BAML, like several US banks, uses London as a base to sell products into the EU, a set-up that might not be possible under the terms of the UK’s EU exit.

The head of Poland’s ruling party has called for a new EU treaty that devolves more power to national capitals, blaming the British referendum result on a desire for greater integration in Brussels, reports Henry Foy.

“The principle of subsidiarity should be clearly defined, because today it is not observed,” said Mr Kaczynski.

“We need a new European treaty.”

“One [EU] attitude is more and more of the Union. This attitude is to blame for ever greater crises, such as Brexit,” he said. “Federalist concepts lead to unhappiness.”

Mr Kaczynski’s broadly eurosceptic and nationalist Law and Justice party came to power in Warsaw in November, and has been in conflict with Brussels for most of its time in office.

S&P, one of the three major rating agencies, has said it is reviewing its credit ratings following the Brexit vote (that means the UK’s sovereign rating as well as the ratings of individual companies that might be affected).

Despite the “leave” vote, any exit will likely be a drawn-out process while treaties or other arrangements are negotiated between the U.K. and the EU regarding their future dealings. As we have stated over the last several months, certain ratings may be affected sooner, including the sovereign rating on the UK as well as the ratings on entities directly linked to the UK sovereign rating.

S&P has previously said a Brexit vote “would deter investment in the economy, decrease official demand for sterling reserves, and put the U.K.’s financial services sector at a competitive disadvantage.”

It also said it could downgrade the UK’s sovereign rating by more than one notch “if we believed that the U.K.’s institutional strength and
ability to formulate policy conducive to sustainable growth were negatively

“Viva Italia! Viva Europa!”

Rachel Sanderson reports from Milan that Italy’s reformist prime minister Matteo Renzi has said it is “time to turn the page” after the UK referendum.

“Europe is our home, it is our home and the home of our children and grandchildren. We say this today more than ever, convinced that the house needs to be restructured, perhaps refreshed but it is the house of our tomorrows.

“We Italians know what it is to have responsibility towards history. To be responsible to our history does not only mean responsibility to our past, to our founding fathers, but also to be responsible to our future, to our children who ask for more Europe, to meet their dreams and their aspirations.”

Italian stocks are set for their worst day on record, falling as much as 11 per cent today.

There will be much to think about in the next few days in terms of policy and economic consequences of Brexit. The Financial Times has a headstart on some of it. Here are Sarah O’Connor and Gonzalo Vina on Immigration. Hard to excerpt, but here is the thinking on the status of EU citizens in the UK:

About 3m EU nationals are in the UK and they make up about 6.6 per cent of the workforce. It is likely that those already here will be allowed to stay. For a start, 71 per cent of them have been here for five years or more (based on 2015 data), which means they qualify for permanent residence. The rest will probably have their rights “grandfathered” so they can stay too, according to comments made by prominent Leave politicians during the campaign. However, there will still be tricky questions to resolve about whether EU residents in the UK will have the right to bring over family members, for example.

The whole point of Carney’s appearance after Cameron this morning was to reassure markets that there will be no financial crisis. Chris Giles reports here:

Mr Carney made it clear that he could only mitigate the damage rather than resolve the problems. “There will be a period of uncertainty and adjustment following this result,” the governor said and in the longer-term the UK economy will suffer because “the economy will adjust to new trading relationships that will be put in place over time”.

And Alex Barker in Brussels is looking at the process of renegotiation from a European angle.

Three fundamental issues arise. On substance, what political and commercial arrangements will Brexit Britain demand and will the EU accept them? In execution, will the exit deal — the divorce and breaking of old obligations — be struck at the same time as a trade agreement covering post-Brexit trade? And if no, is a transition possible to ensure a soft landing?

Labour MPs have submitted a motion of no confidence in Labour leader Jeremy Corbyn.

David Cameron may not be the only party leader on his way out.

Two Labour MPs, Margaret Hodge and Ann Coffey, have submitted a motion of no confidence in Labour leader Jeremy Corbyn.

The motion has no immediate impact, but calls for a discussion at Labour’s next parliamentary Labour party meeting on Monday.

Getty Images

“The European referendum was a test of leadership and I think Jeremy failed that test,” Hodge said to Sky News earlier.

“I think every MP, every member of the Labour party, has to look into their heart in the way I did this morning and ask themselves the question,” she said. “Is Jeremy Corbyn really the right person to see the Labour party through these very tumultuous times and certainly to serve the nation?”

For more on this developing story, read this take from the FT’s Jim Pickard and Gonzalo Vina.

The FT’s Vincent Boland has this report from Dublin:

As the shock of the referendum result starts to sink in in Dublin, prime minister Enda Kenny has spoken after a marathon cabinet meeting. Looking subdued, he said:

“I am very sorry that the result of the referendum is for the UK to leave the EU. However, the Britsh people have spoken, and we fully respect their decision.

“I want to reassure the Irish public that we have prepared to the greatest possible extent for this eventuality.

“There will be no immediate change to the free flow of people, goods and services between our islands.”

On Northern Ireland, Kenny added: “The implications of this vote for Northern Ireland and for relations between north and south on this island will require careful consideration. These will be a particular priority for the Irish government.”

He said the government will do its utmost to maintain the common travel area between the two islands.

He finished with a personal message for UK prime minister David Cameron – “I wish him the very best for the future” – and sent regards to Mr Cameron’s wife and children.

People unlikely to receive much in the way of sympathy in the days ahead: pollsters (is this an even worse failure than the 2015 election? Possibly); traders caught the wrong way on the pound – see this rather tragic tweet before the first results were in

But what about property owners? Judith Evans, property correspondent and tireless all night Live blogger,has written on the end of the UK house price boom:

The UK’s house price boom is set to come to an abrupt end after the vote to leave the EU, estate agents and analysts said, predicting an immediate slowdown in transactions and a halt to the steep price rises of recent years. Housebuilders’ shares fell sharply and analysts also predicted a shock for commercial property.

Margaret Hodge – the Labour MP behind the motion of no confidence in Jeremy Corbyn, the Labour party leader – is on Sky News calling on Corbyn “to do the decent thing and resign” so that “the Labour party can restore itself”.

According to Sophie Ridge of Sky, the motion is due to be voted on next Monday.

This is going to be worth watching – particularly if talk of an autumn general election grows louder.

The FT’s science editor Clive Cookson has been talking to leading scientists who worry the UK will lose EU research funding and become disengaged from the wider global science community.

“We must ensure the UK retains its globally competitive edge in a post-Brexit world by finding ways to sustain the strong research collaborations we have built with our European partners,” said Sir Robert Lechler, President of the Academy of Medical Sciences. “As part of this, research will need access to funding sources to replace those put at risk by exiting the EU, as well as clear plans to maintain access to European research talent and mechanisms for scientific collaboration.”

Sir Venki Ramakrishnan, president of the Royal Society, said: “One of the great strengths of UK research has always been its international nature, and we need to continue to welcome researchers and students from abroad. Any failure to maintain the free exchange of people and ideas between the UK and the international community including Europe could seriously harm UK science.”

Lord Martin Rees, Astronomer Royal, called the Brexit vote “deeply depressing – a view shared across mainland Europe. Support for the EU was strong, especially among the young, the universities, the technical community, and a majority of our business and professional leaders. Despite all that, we’re landed with a frightening scenario.”

Dame Anne Glover, vice-principal of Aberdeen University and former EU chief scientific adviser, felt “personally heartbroken. I have great concern for the future of British science, engineering and technology,” she said.

A dispatch from Washington, where Thomas Donohue, president and chief executive of the US Chamber of Commerce has said Britain needs to ensure there is a “redoubling” of the commitment to open trade and investment over the next few months to reassure US companies.

Via the FT’s Washington bureau chief Demetri Sevastopulo, Donohue said: “American companies’ investments in Britain are worth more than half a trillion dollars, and many of those investments were made to reach not just British consumers but those in the European mainland as well. We are committed to working with the UK government to ensure that the priorities of these stakeholders are taken into account in the debates that lie ahead.”

Farmers expects pro-Brexit campaigners, including George Eustice, farming minister, to make good on promises to match or improve on the €3.1bn received in EU subsidies in 2014, reports the FT’s Scheherazade Daneshkhu.

Meurig Raymond, president of the National Farmers Union, which supported remaining in the EU, said today: “It’s a political car crash what with the prime minister resigning and the uncertainty. A lot of prominent politicians have made some big promises about maintaining the same level of support – even more support – and promises they would deregulate. So we’ll have to hold these people to account in the months ahead.”

Mr Eustice, who grew up on a farm, told farmers at the annual NFU conference in February that he abandoned the land for politics because of the EU’s “pointless paperwork and spirit-crushing regulation.”

He said on Friday it was: “Excellent news that the nation has decided to leave the EU and re-establish democratic self government in the UK. There is so much more we can now achieve.”

Meanwhile, Rabobank, the Dutch lender, said Brexit was likely to lead to higher food prices.

“The UK is a food importing country. Its isolation from the internal EU market after Brexit is likely to increase its costs of sourcing food products, while it also increases the costs of the technology needed to produce food,” according to the report.

The UK’s planned exit from the EU is likely to cause acute problems for Switzerland, which is already outside the bloc, writes Ralph Atkins.

The affluent Alpine economy has to renegotiate its own relations with Brussels so it can introduce quotes on EU immigration – as required by a Swiss referendum in February 2014.

Those negotiations were on ice during the UK campaign. Now in the chaos resulting from the UK vote, it is unlikely progress will be made any time soon.

Johannn Schneider-Ammann, Swiss president, told journalists this morning it was “currently impossible to say” whether any progress would be made this summer. Negotiations have “certainly not got simpler,” he said, using British understatement.

That could create further damaging uncertainty for Swiss business, which depends on Switzerland’s web of bilateral contracts with the EU to sell goods and services, and to import skilled workers from across the continent.

Curbs in EU immigration would violate the principle of the free movement of people across Europe. The risk is that without a deal, Brussels could simply cancel the bilateral contracts leaving Switzerland – like the UK – in limbo land.

One school of thought in Switzerland was that the country could form an alliance with the UK. But Mr Schneider-Ammann said that was “currently not a topic” being discussed in Bern. Bern has until February next year to implement quotas on EU immigration – three years after the 2014 referendum.

It is possible the stand-off will only be resolved in another Swiss referendum. “The chances are rising that the future of the free movement of labour or even the bilateral treaties will be decided in the near future in the ballot box,” UBS economists wrote in a note.

With an hour and a half an hour to go before Wall Street opens, the only certainty is volatility. FastFT reports that the Vix – which measures implied volatility in the days ahead – has spiked to 40 per cent, which would take it past its high for a year, by a long way.

Europe is already having One of Those days. Britain votes out, Spain and Italy have the worst day of trading since, um, ever. Mehreen Khan of Fast has the story and the gory graph.

Thomas Hale of our capital markets team is meanwhile reporting that European banks are back down to their lows of 2012, at the worst of the Eurozone crisis.

The Euro stoxx banks index is now down just over 17 per cent. Today, it has touched its lowest level since August 2012. It has all carried on falling this morning, even while UK banks have recovered some (but nowhere near all) of their dramatic earlier losses at the market’s 8am open.

It seems Greek hoteliers are already worrying about currency risk following sterling’s plunge in response to yesterday’s vote for Brexit.

A senior official at Greece’s central bank has just denied reports on social media that tourists cannot change pounds at Greek banks and ATMs, the FT’s Kerin Hope reports from Athens.

The source appears to be a tweet from a UK tourist whose hotel is refusing to change British and Scottish notes “because we do not have an official exchange rate from the Bank of Greece.”

The official said: “This is quite untrue. The tourist operators all know they can find the rates on the Bank of Greece website.”

Asked about ATMs, he said there were “no problems” for users of UK-issued credit cards.

In a preview of all of the rows to come, FairFuelUK – which campaigns for lower petrol prices – has put out a statement saying they are “horror-struck” by the idea that drives may face higher fuel prices.

Its founder Harold Cox said:

“The Brexit victory shows it is London’s Westminster bubble that has been out of touch with the wider majority and it is the greedy currency speculators & parts of fuel supply chain who will probably unscrupulously hike pump prices simply because of this unanticipated result.”

Martin Wolf on what next for the global economy

The FT’s chief economics commentator Martin Wolf says Britain’s decision to leave the EU will lead businesses and investors to retrench, and disinvest from the UK. Furthermore, for companies dependent on the EU, the restructuring process could take a decade.

Capital controls are a thing of the past, obviously (except in Greece). You can move as much money across British borders as you like.

Hold that. Thomas Cook, through whom many sunshine-bound holidayers will be hoping to shift their pounds into euros, dollars or whatever, is reportedly restricting currency transfers. Here is Steph of the BBC:

This is not currency risk, per se: the £/$ exchange rate has been stable-ish for a few hours now at $1.37. Instead, the IT system cannot cope.

Here is Fast FT with a comment from Thomas Cook.

UPDATE: This citizen in Greece reports that efforts to raise money in exchange for pounds are already being stymied

James Wilson has been in Broxbourne taking the temperature of an area which was keen to Leave but still has worries about what happens next.

Broxbourne is just 20km and a half-hour train journey from the City of London but its residents spoke for much of middle England in the referendum, decisively rejecting the warnings against Brexit emanating from most of UK business.

The Hertfordshire district – until last year the home of Tesco, the country’s largest retailer – was one of the first to reveal a decisive wish to leave the EU as results started to trickle in on Friday, voting 66 per cent in favour of Brexit and helping to set the tone for a shock result.

“I am glad we are out,” said Carole Penny, a secretary heading from Cheshunt, part of the district, to work in London. “I think we are strong enough to be on our own . . . If we put the money [contributed to the EU] back into our own country we can be a stronger country.

“Let’s be positive … I am sure we can thrive.”

Responses from people on Friday suggested that many other pro-Brexit voters were concerned about the possible economic impact of their decision – but that migration, and pressure on services such as education and health, had played heavily in the vote.

“I am pleased, but a little worried about what comes next… in the end it was my heart over my head,” said Ron Gasson, a bank worker living in Cheshunt, citing concerns over strain on public services from immigration.

Katie Collins and her husband Blake, a lorry driver, voted out. “We are going to have some more input in our own country. The borders will be maintained better,” said Mrs Collins.

She said they had failed to get the school place they wanted for their daughter, while Mr Collins said getting a GP’s appointment was a trial. “The country has lost its way,” he said.

Mrs Collins cited concerns over future migration if Turkey joined the EU – something raised by some in the Leave campaign, though considered a very remote possibility. “It is not about race, it is a multicultural country – but it is about what we thought was best for this country,” she said.

Kawai Lai, an employee at a hedge fund in London, said he had voted to remain but was not surprised by the result from the town. “People are feeling the pinch a bit… I would not say Broxbourne is the most affluent area,” he said. “Perhaps people are not happy with austerity… maybe they do not see things working out for them.”

Britain’s decision to leave the EU also means a headache for a host of international bodies.

The International Monetary Fund was one of the most vocal in warning about the dangers of Brexit. Before the vote, its head Christine Lagarde warned the economic consequences ranged from “pretty bad to very, very bad”.

In a statement today, she said the IMF had taken note of the decision.

“We urge the authorities in the U.K. and Europe to work collaboratively to ensure a smooth transition to a new economic relationship between the U.K. and the EU, including by clarifying the procedures and broad objectives that will guide the process.”

“We strongly support commitments of the Bank of England and the ECB to supply liquidity to the banking system and curtail excess financial volatility. We will continue to monitor developments closely and stand ready to support our members as needed.”

They used to say when the US sneezes, the rest of the world catches a cold. But the US is a fifth of the global economy. Consider Britain and the Republic of Ireland, the former some 15 times larger than the latter, the economic linkages deep and immediate.

The Irish government therefore must have been thinking as hard about the consequence of a Brexit vote as that of the UK, and has now adopted what it calls a Contingency Framework to identify and manage the issues following the Out vote.

The Taoiseach, Enda Kenny, has issued these words of comfort:

It is important to be clear: the UK has not actually left the EU. Until it formally withdraws from the Union, the UK remains a full Member, with all of its existing rights and obligations. Today’s result marks the beginning of a new phase of negotiated withdrawal – one that is expected to take place over at least two years and possibly longer. Businesses can continue to trade as normal and people can continue to travel as normal between Ireland and the UK, including Northern Ireland. In the meantime, the Government has adopted an initial Contingency Framework to map out the key issues that will be most important to Ireland in the coming weeks and months. This will be an iterative process as issues emerge and recede in the course of negotiations.”

This Framework have its work cut out. The press release identifies the following priority issues: UK-EU Negotiations, British-Irish Relations, Northern Ireland, Trade, Investment, North-South Border Impacts, Competitiveness and Macro–economic issues, Research/Innovation funding and Energy.

Ireland’s stock market, the ISEQ 20, is down 10% as we speak. But Ireland is an economy based considerably on overseas owned companies – Apple, Google, Dell and so on. Statements from them will matter a great deal

The FT’s Jack Farchy and Max Seddon have filed from Moscow, where Russia’s foreign ministry described the Brexit vote as a demonstration of the “serious contradictions in the EU”.

“It is already quite obvious that the results of the referendum clearly demonstrated the serious contradictions in the EU, the differences of opinion on a whole range of fundamental issues, above all in relation to the level of integration within the union,” the foreign ministry said in a statement on Friday.

Maria Zakharova, foreign ministry spokeswoman, added that a wave of similar moves in other European countries could follow the vote. “Don’t be surprised if instead of terms for specific countries like ‘Grexit’ and ‘Brexit’, there will appear a new concept of “Whoexit?” she wrote on Facebook.

President Vladimir Putin’s spokesman offered a more measured tone, noting that Moscow was “interested in the EU remaining a major economic force”. Mr Putin himself was due to make a statement on the matter later on Friday.

But many pro-Kremlin politicians could not contain their sense of vindication at the result. Konstantin Kosachev, head of the foreign affairs committee in Russia’s upper house of parliament, said: “Europe’s greatest integrationist project, its obvious achievements aside, has yet to solve its main problem: to become appealing and accessible to the broader masses of the population,” said.

Vladimir Zhirinovsky, a Trump-esque nationalist firebrand, said the vote was a harbinger of further turbulence still. “Rural, provincial, working Britain said ‘no’ to the union, which was created by the financial mafia, globalists and the rest,” Zhirinovsky said, according to Interfax.

“After Britain, NATO, Schengen and the euro will collapse. Long live the Russian rouble and the development of relations with all democratic countries of Europe!”

State TV, recalling Russia’s own dramatic currency collapse in 2014, mocked the pound’s slide. “The pound is the new rouble!” one anchor said.

The FT’s man in Brussels, Jim Brunsden, has a copy of the email that European Commission President Jean-Claude Juncker has sent to commission staff.

Yesterday, the citizens of the United Kingdom voted to leave the European Union. This result makes me personally very sad – but I respect their choice.

I know that many of you are concerned about your future after this vote. I fully understand that. So I want to send a clear message to you, colleagues, and especially to colleagues of British nationality.

According to our Staff Regulations, you are “Union officials”. You work for Europe. You left your national ‘hats’ at the door when you joined this institution and that door is not closing on you now. As European civil servants you have always been loyal to our Union, contributing tremendously to our common European project.

And so it will be in this spirit of reciprocal loyalty that I will work together with the Presidents of the other European institutions to ensure that we can all continue counting on your outstanding talent, experience and commitment. I know you all have legitimate expectations about your rights and duties, your families who might have followed you to Brussels and your children who might be enrolled in schools here.

Let me assure you that I will do everything in my power as President of the Commission, to support and help you in this difficult process. Our Staff Regulations will be read and applied in a European spirit.

In the coming days and weeks, you will all have the opportunity to show the European Commission at its best. The eyes of the world will be upon us, expecting us to provide stability, act decisively and uphold Europe’s values. I have every confidence in you. Together we will rise to that task.

What is Article 50 anyway?

Everyone’s talking about Article 50 today – Brussels wants it triggered straight away, David Cameron and Boris Johnson say there’s no rush. But what exactly is it?

In short, it’s the way you formally file for divorce from the EU. Once it’s triggered, the clock starts ticking for the UK to negotiate withdrawal terms – a two-year period that can be extended, but only with the unanimous support of all member states.

The UK leaves once a deal is struck, which requires the support of the UK and a “qualified majority” of the remaining states, explains Alan Renwick of UCL in this useful explainer. But if the two-year window runs out and a deal hasn’t been agreed, the UK leaves automatically on terms it may not like.

That means once Article 50 has been triggered, the balance of power tilts towards the remaining member states of the EU – which helps to explain why David Cameron and Boris Johnson don’t want to start the clock ticking until they have all their ducks in a row.

It also might explain why Brussels would like it triggered as soon as possible.

Roberto Gualtieri, chairman of the European Parliament’s economic and monetary affairs committee, told the FT today:

“What I think we need is quickly to define a line (for how to procede) and give a perspective. That’s why I’m not happy with this delay of the notification (of Article 50). If we start with a three month delay of the whole thing I don’t think it is a good signal”

As the FT’s David Allen Green notes:

The FT’s Alex Barker explains there are some alternatives to Article 50.

“One is to attempt a divorce on British terms. The Leave campaign has outlined plans to legislate in the House of Commons to repeal some EU obligations immediately, while holding-off on invoking the Article 50 divorce clause to deprive the EU of leverage on timing.

Any unilateral steps would seriously raise tensions with the EU. Brussels is looking at options to retaliate, including suspending the privileges enjoyed by British companies under the single market. Sir Andrew Cahn, a former head of UK Trade and Investment, Britain’s trade promotion body, said: “Acting unilaterally would throw the law of the land into uncertainty, and risk a tit-for-tat response from others. It could be a slippery slope to real chaos.”

Finance ministers and central bank governors from the G7 – France, Germany, Italy, Japan, the US and Canada – have issued a statement saying they “respect the intention expressed today by the people of the United Kingdom”.

The statement, sent out by a US Treasury official, said:

We affirm our assessment that the UK economy and financial sector remain resilient and are confident that the UK authorities are well-positioned to address the consequences of the referendum outcome.

We recognize that excessive volatility and disorderly movements in exchange rates can have adverse implications for economic and financial stability.

G7 central banks have taken steps to ensure adequate liquidity and to support the functioning of markets. We stand ready to use the established liquidity instruments to that end.

We will continue to consult closely on market movements and financial stability, and cooperate as appropriate.

We remain united and continue to maintain our solidarity as G7.

The UK is a member of the G7.

Earlier this afternoon, chancellor George Osborne said he had “discussed” the referendum outcome with his G7 colleagues.

There are some very disappointed younger voters out there. Three out of four 18 to 24-year-olds backed the UK remaining in the EU, according to an opinion poll taken shortly before hand.

FT reader Nicholas comments have been getting huge pick-up on social media:

Here is a snippet:

The younger generation has lost the right to live and work in 27 other countries. We will never know the full extent of the lost opportunities, friendships, marriages and experiences we will be denied.

Freedom of movement was taken away by our parents, uncles, and grandparents in a parting blow to a generation that was already drowning in the debts of our predecessors.

And another in the same vein:

So let me get this straight, as a young person, we bailed out the city and we bailed out the over inflated pensions and savings that were gambled away by governments we didn’t elect (Thatcher, New Labour) we will have to bail all of these people out while millennials see a decline in earnings and an ageing population (rising pensions, healthcare costs etc).

The FT is hosting a reader discussion on the referendum vote here

George Osborne is widely regarded as having submarine-like qualities, surfacing only when convenient. We have not heard much from the Chancellor today, but this has just been tweeted:

That sounds like a statement not inconsistent with a determination to hang around a while, something few pundits are willing to predict. On Betfair, Mr Osborne’s odds of becoming leader are now somewhat longer than those for Andrea Leadsom, Priti Patel, and David Davis. But few Conservatives will want anything but a smooth and efficient handover at the Treasury, so Mr Osborne’s actions are still worth watching.

If you want a fascinating account to follow in the next 24 hours, Rupert Harrison, former top Osborne aide and now Blackrock strategist is a must-follow:

Statement just out from the US Federal Reserve:

The Federal Reserve is carefully monitoring developments in global financial markets, in cooperation with other central banks, following the results of the U.K. referendum on membership in the European Union. The Federal Reserve is prepared to provide dollar liquidity through its existing swap lines with central banks, as necessary, to address pressures in global funding markets, which could have adverse implications for the U.S. economy.

As a reminder, that follows similar messages about “doing what’s necessary” from the ECB…

The ECB stands ready to provide additional liquidity, if needed, in euro and foreign currencies. The ECB has prepared for this contingency in close contact with the banks that it supervises and considers that the euro area banking system is resilient in terms of capital and liquidity. The ECB will continue to fulfil its responsibilities to ensure price stability and financial stability in the euro area.

…and the Bank of England’s Mark Carney…

The Treasury and the Bank of England have engaged in extensive contingency planning and the Chancellor and I have been in close contact, including through the night and this morning. The Bank will not hesitate to take additional measures as required as those markets adjust and the UK economy moves forward.

Just to put the fall in Sterling today in context, FastFT have calculated it is likely to rank at the top of the biggest historic falls for major global currencies.

Rick Mertens is in Clacton-on-Sea, the only place in the country with a Ukip MP.

Nearly 70 per cent of voters in the area voted for the UK to leave the European Union.

Mertens met Fred Varlew, 81, who was enthusiastic about the referendum result, saying: “I jumped out of bed this morning. Finally, we got our country back! Yeah!”

Varlew, who was sunbathing topless on Clacton Pier (pictured) said he was “convinced that the pound will finally bounce back”.

Meanwhile, Daryl Hinds, 46, who owns The Sea Breeze Diner in Clacton-on-Sea, said he had second thoughts about the “Leave” vote he cast yesterday when he read the news this morning: “Now that I’ve seen that the pound has dropped I’m not so sure any more. What will it mean for small businesses like mine? Hopefully it’s a good thing.”

Brexit: what next for business?

With the vote to leave the EU, the FT’s business editor Sarah Gordon says opinion about Brexit across the UK business community is mixed but that uncertainty, market volatility and the plunging pound are bad for UK companies and foreign investors.

The White House has just published a statement from Barack Obama:

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.

As a reminder, here’s what the US president said when he came to the UK in April:

Barack Obama has delivered a stinging rebuke to supporters of a British exit from the EU, saying that if the UK left the 28-member bloc it would go “to the back of the queue” in seeking a trade deal with Washington.

UPDATE: That was swiftly followed by a statement from Jack Lew, US Treasury Secretary, which is similar in tone to the statements we’ve had from the Fed, BoE and ECB.

The people of the United Kingdom have spoken and we respect their decision. We will work closely with both London and Brussels and our international partners to ensure continued economic stability, security, and prosperity in Europe and beyond.

We continue to monitor developments in financial markets. I have been in regular contact in recent weeks with my counterparts and financial market participants in the UK, EU and globally and we are continuing to consult closely. The UK and other policymakers have the tools necessary to support financial stability, which is key to economic growth.

Amid the gyrations in the markets, a number of corporate leaders are trying to calm nerves.

Brexit has “no impact” on the business and strategy of EDF in the UK, including its plans to build a new nuclear plant at Hinkley Point in England, said Jean-Bernard Lévy, the chairman of the French public utility, on Friday, Kiran Stacey reports.

“As of today, we believe that this vote has no impact on our strategy, and the strategy (…) for our UK subsidiary has not changed,” the leader assured reporters before leaving for Perpignan where he will inaugurate a new EDF wind farm.

Our business strategy is not linked to Great Britain’s political affiliation with the European Union, so we have no reason to change it,” he added.

The People’s Bank of China, China’s central bank, has said in a statement today that it is paying “close attention to the British referendum on leaving the EU”, the FT’s Lucy Hornby reports from Beijing.

The PBOC statement says:

We have already noticed the reaction of the financial markets after the referendum results were announced, and have prepared plans to deal with it.

We will continue to implement a prudent monetary policy, comprehensive use of various monetary policy tools to maintain adequate and appropriate liquidity and maintain financial stability.

We will further improve the market mechanism of the RMB exchange rate, and keep the RMB exchange rate basically stable at a reasonable and balanced level. We will further strengthen communication and coordination with relevant central banks, monetary authorities and major international financial organizations.

Barratt Developments chief executive David Thomas has insisted that the “strong fundamentals” of the business are “unchanged”, after the referendum result sent shares in the UK housebuilder down more than 24 per cent today.

Thomas said:

“We have prepared for this eventuality and whilst we recognise there will be a period of uncertainty as the UK’s exit is negotiated, the strong fundamentals of our business are unchanged.

“There is a structural undersupply of quality homes in the UK, and we have a clear strategy to address this, supported by a strong balance sheet to execute our growth plans.

“We lead the industry for the quality and design of our homes, and our customers love what we build – we recently scored over 90 per cent in the Home Builders Federation customer satisfaction survey, achieving the maximum five star rating, the only major national housebuilder to do so.

“We are confident our business can respond to the changing landscape and we remain focused on driving it forward.”

Gideon Rachman on what leaving EU means for UK’s global status

Britain’s decision to leave the EU has global implications, with the west turning inwards and protectionist forces on the rise. In addition, it is troubling for the US, whose closest allies are the Europeans.

A selloff at the start of the New York trading session was paced by declines in the financials and technology sectors, as investors shifted into haven assets, the FT’s US capital markets correspondent Eric Platt reports from New York:

Telecommunication and utility stocks, two industries generally considered less geared to the global economy with relatively stable cash flows and debt profiles, both slipped less than 0.5 per cent in the first few minutes.

Financials, industrials and technology stocks were among the hardest hit, as concerns intensified over a slowdown in the global economy following the UK Brexit vote.

With thoughts now turning to the negotiations, a German newspaper claims to have a copy of the nation’s post-Brexit-referendum strategy, writes Stefan Wagstyl.

The German finance ministry has declined to comment on the leak.

Handelsblatt, the business daily, says it has secured a copy of an emergency plan entitled “German strategy for Brexit” which warns against treating the UK too leniently in departure negotiations for fear of encouraging others to follow suit.

The newspaper reports the document says there would be “no automatic access to the single market” because other states, including France, Austria, Finland, Hungary or the Netherlands, might seek similar deals.

One would try to “avoid offering false incentives for other member states when establishing new arrangements,” says Handelsblatt quoting the report.

It adds: “The extent of such imitation effects would depend largely on how Great Britain was being treated.”

According to Handelsblatt, the ministry paper says Germany would offer “constructive departure negotiations” but separation proceedings would be difficult.

It gives the example of Britain’s involvement in the European Investment Bank, the EU-run lender.

After the two-year period, the German government would aim for “associate status for the UK” and Great Britain would become an “associate partner country”.

Handelsblatt comments: “one cannot allow London to pick and choose in relation to the internal market.”

Since Wall Street has opened, the FTSE 100 has enjoyed a little bounce – well, we write “little”, but 100 points would be a fair amount on any normal day. The pound is still roughly where it was, and the banks, housebuilders and so forth are as miserable as they were, so this looks likely to be a move based on a calmer view on the global economy.

Glance at the stocks that are actually trading up and this story firms up, somewhat. Compass Group makes the bulk of its sales outside the UK, as does Rolls Royce, GlaxoSmithkline, Unilever and other risers.

Alexis Tsipras, Greece’s leftwing prime minister, has weighed in with a lengthy statement on Europe’s problems, taking aim at, among other things, austerity programmes, the “a la carte” handling of the refugee crisis and “arrogant” technocrats, the FT’s Kerin Hope reports from Athens:

“The decision of the British people must be respected but it confirms the existence of a deep crisis, a crisis of identity and strategy in Europe,” Tsipras said.

“The British referendum will either be a wake-up call for the sleepwalker heading for the abyss or the beginning of a very dangerous and slippery path for [Europe’s] peoples.”

Stuck in a prolonged recession and frequently at odds with its trio of international creditors – the European commission, the European Central Bank and the International Monetary Fund – Athens a year ago was on the brink of an involuntary “Grexit” from the euro.

Mr Tsipras held a referendum of his own last July on a new international bailout for Greece. He then proceeded to ignore a strong “no” vote, signing up anyway for a Euro86bn third rescue package.

In today’s statement he calls for a new start: “We now have to a raise a barrier against Euroscepticism and the far-right and re-found a people’s Europe on the principles of democracy, freedom, equality and solidarity….That’s a Europe worth fighting for.”

Before the referendum the Bank of England said it would use all the tools at its disposal to support the economy, but it was coy about whether a rate cut (to boost demand) or a rate hike (to combat inflation) was more likely.

Today, investors are betting on a rate cut, reports the FT’s Mehreen Khan:

The implied probability of a 25 basis point (0.25 percentage point) cut in Bank rate from its current record low of 0.5 per cent is now at nearly 75 per cent for February 17. This has jumped from a 17.5 per cent chance priced in before the referendum result. A poll of 70 economists carried out by Reuters also expects the Bank’s next move to be an easing in policy, with the chances of a recession at 53 per cent this year.

However, policymakers will have to weigh this against the argument that a rate cut from 0.5 per cent might cause problems for building societies without necessarily delivering a huge stimulus.

Jeff Immelt, chief executive of General Electric, which employs 22,000 in the UK and 100,000 in Europe, says the company remains “firmly committed” to both the country and the continent, the FT’s US industry and energy editor Ed Crooks reports.

Immelt said in a statement:

“Although GE supported the UK remaining in the EU, we respect the decision of the British people and remain firmly committed to the UK and Europe.

“GE has 22,000 employees in the UK and 100,000 employees in Europe overall that will continue to focus on delivering great outcomes for our customers.

“We believe in the potential to build a competitive Europe and UK through digital transformation and manufacturing.”

The pollsters had a not particularly good night. Not as bad as the Remainers, but bad. Ben Page of Ipsos Mori has released a defiant, yet thoughtful statement defending their role.

Clearly, we are disappointed that this was not more accurate. Having said that, we have consistently said that the race was very tight based on our last two polls, and that the outcome of the referendum was not decided. Indeed, in our final results we published the 26% probability – one in four – that it could be a Leave vote, and pointed out that even in our final poll 13% of voters said they might change their mind when they actually reached the polling booth.

The whole statement is worth reading. Bottom line: once-every-forty-years polls are not that easy, it turns out.

For investors, there is normally a silver-lining to be found somewhere.

Simeon Kerr reports that in the Middle East, eyes are turning to a possible buying opportunity in London property.

Some Dubai residents, who are paid in dollar-pegged United Arab Emirates dirhams, believe that the Brexit vote may precipitate weaker UK house prices, especially prime London properties that are a popular investment choice for many Gulf Arabs.

When combined with the sharp decline in sterling, some are now considering purchasing UK real estate.

“I sense a buying opportunity,” said one Dubai-based financial sector worker, who did not want to be named. “The threat to the British economy has been totally overblown.”

Cluttons, a real estate consultancy, said US dollar or UAE dirham investors would now find the average prime Central London residential asset $96,000 (Dh350,000) less valuable than it was on June 20.

“Conversely of course, London residential property is now $96,000 cheaper for international buyers looking to enter the market,” Faisal Durrani, head of research at Cluttons in Dubai, said in a statement on Friday.

“A silver lining today is that those from the Gulf eyeing up a London residential asset will find it 31 per cent cheaper than it was during the last market peak in Q3 2007, suggesting that we may be on the cusp of seeing a significant resumption in property investment activity in the British capital,” he added.

He expects London houses to retain their appeal as safe haven assets for global investors, alongside other asset classes such as gold.

“The longer term implications are too early to assess, but we may start to see the unlocking of London’s stalled residential property market, with investors both exiting and entering the market as we head towards a period of demand volatility,” he said.

Tim Hopper, managing director and chief economist for TIAA, which has more than $851bn in assets under management, says “people are stunned” on Wall Street, the FT’s Alistair Gray reports from New York.

“But at the same time let’s not get too panicked,” Hopper added. “This is really more 1987 [when markets were hit on Black Monday but recovered] than Lehman [which caused a systemic financial meltdown], in the sense that this is a gut reaction. Most likely an overreaction.”

“We need to take a step back and take a deep breath and recognise that
the UK population has spoken, that the UK economy is the second
largest in Europe and there are are a lot of positive things to say
both about the UK economy and its regulatory regime.”

Hopper also doubted banks would immediately begin moving personnel out of

“They will take a wait and see attitude. If indeed they don’t
have to move personnel, they won’t do it. They’re not going to
pre-emptively move. If indeed the American or foreign banking sector
needs to move it’s going to be a few years from now.”

Vladimir Putin has said that the vote for Brexit was “understandable” and accused the British government of “arrogance and a superficial approach” to important issues, as Moscow erupted in schadenfreude at a result that was widely interpreted as indictment of Brussels, the FT’s Jack Farchy reports from Moscow:

The Russian president described the vote as the result of “nothing other than arrogance and a superficial approach from the British leadership to issues that are vital to their country and to Europe as a whole” and said it would have global consequences. He added, though, that there would be “both pluses and minuses”.

“It seems to me understandable why this happened,” Mr Putin said at a summit in Uzbekistan on Friday, according to Russian newswires. “Firstly, no one wants to feed and subsidise the weaker economies.”

“Evidently, people are not happy with the resolution of security issues, which have sharply deteriorated on the back of strong flows of migrants,” he added.

He also compared the EU to the Soviet Union, saying that the European parliament imposed a greater number of obligations on EU member states than the Supreme Soviet of the USSR had imposed on the Soviet republics.

“Some people like it, some people want to go down the path of blurring national boundaries; some people don’t like it. The vast majority of citizens of Great Britain, judging by the results, do not like it,” Mr Putin said.

He rejected any suggestion that Russia had interfered in the campaign and criticised David Cameron for a “flawed attempt to influence public opinion” by suggesting that the Russian president would be happy with a victory for the Leave camp.

Responding to the suggestion by Philip Hammond, UK foreign secretary, that European resolve to continue with sanctions against Russia would be “wavering” after the vote, Mr Putin said that he did not expect the result to influence the EU’s sanctions policy.

A reminder of how the vote for Brexit is about far more than just the EU.

More on the article 50 timings from our man in Brussels

City economists have spent today tearing up and re-doing their forecasts for the UK economy in light of the poll result. Most of them haven’t sent out their quantitative predictions yet, but the FT’s Gemma Tetlow has been finding out what they think.

Nick Brooks of ICG: (a specialist asset manager) said that UK growth would be revised down and recession is possible.

Bill O’Neill, UBS: economic stagnation in 2017; material risk of recession, depending on how the authorities [HMT, Bank, politicians] deal with this.

Marie Owens Thomsen, Indosuez Wealth Management (i.e. Credit Agricole’s wealth management arm): Really bad news for the UK. It will revert to being a country with a greater propensity for balance of payments crises, needing help from the IMF. Recession is very likely in the second half of 2016.

Neil Williams, Hermes: Downwards revision to growth expectations. Exactly how much depends on what path we go down – if we severed all ties with our main trading partner, things would be very bad, but this seems unlikely; if there is a soft exit, things would be easier but it could still take a long time to negotiate.

Capital Economics: The UK’s vote to leave the European Union (EU) has clearly weakened the near-term outlook for the UK and global economies. But we still think that it will ultimately prove to be less damaging than many estimates have suggested.

P&G, the manufacturer or Pampers, Olay and many other households brands, says it “remains committed” to the UK. We’ve had quite a few of these corporate statements today – they tend to be pretty cautious and don’t say too much at this stage. Still, P&G is an important company: the world’s biggest consumer goods group by sales makes 25 per cent of sales in Europe, within which the UK is its biggest market.

“P&G remains committed to serving consumers in the UK, as we have for more than 80 years. We will work with the UK government and other organisations as needed to help ensure a smooth transition.”

The company added that it was “not appropriate” to speculate on the potential impact of the UK leaving the EU as the transition is years away, reports the FT’s Lindsay Whipp.

We posted earlier that the number of Google searches for “Irish passport” from the UK spiked after the referendum result became clear.

Now the FT’s Conor Sullivan is pointing us in the direction of the official guidance for Britons seeking Irish passports.

It looks like it is pretty simple if one of your grandparents was born in Ireland, or if one of your parents was an Irish citizen at the time of your birth…

Brexit may be the word on the tip of everyone’s tongue today, but recently-published viewing figures for the first two hours of last night’s television referendum coverage shows Britons would still rather watch sport than politics.

Via the FT’s media correspondent David Bond, the BBC had 3.9m viewers last night between the hours of 10 and 12pm. ITV pulled in 1.2m viewers over the same time period.

By comparison, 14m Brits watched England play Slovakia in the Euro 2016 tournament on Monday night.

A deliriously happy email arrives from the British National Party. The subject line reads simply: “WE DID IT”

Britain’s best-known far right party, which not long ago enjoyed two seats in the European parliament but has more recently fallen into disarray, says it is back in demand.

Phones have been ringing off the hook at BNP HQ as scores of current members renew their membership and new members join the BNP following the incredible success of the Out of the EU campaign.

Britain’s carmakers have been a big economic success-story over the past five years, but Ford said today it may cut jobs in Britain as a result of Brexit, reports Peter Campbell, the FT’s Motor Industries Correspondent. It’s the first auto group to raise questions over the future of its investments in the country, he says.

The group, which closed two UK plants in 2012 with the loss of thousands of jobs, said it “will take whatever action is needed” to keep its operations competitive.

Many of the world’s largest car groups have manufacturing operations across Britain, and about 80 per cent of the cars that roll off UK production lines are destined for export — half of those to the rest of the EU.

Toyota, Jaguar Land Rover and Honda said they were committed to their UK operations, while BMW said there would be “no immediate change”. But analysts said car companies will be wary of giving UK plants new work while the prospect of trade tariffs are looming.

Nick Gill, automotive expert at Capgemini, said: “If I’m a carmaker and I’m taking a decision on where next to place my model, are you going to do it in a market that’s small with concerns around currency and its distribution into other markets, or will you put it [in a place] with safety in currency and a large market for sales?”

Ford, which employs 14,000 people at its sites in Bridgend and Dagenham and last year made 1.6m engines, said it has “made no changes to our current investment plans and will not do so unless there is clear evidence that action is needed”.

But, it added: “We would expect that the combination of a softer industry and a weaker sterling would have an adverse impact on our operations in the long term.”

Are London property prices about to fall?

The FT’s property correspondent Judith Evans points to early signs of how the referendum may affect the market in high-end London homes, where prices were already starting to slip:

Charles McDowell, an estate agent working in some of the capital’s most exclusive areas, says he has had two deals fall through because of the referendum, but agreed another house purchase by a European buyer keen to capitalise on currency shifts.

“This morning we agreed a house in Belgravia to an Italian client who is making in total a 12 per cent saving, largely due to the currency,” he said, adding that he thought the failed purchases might be renegotiated at lower prices.

“Oddly enough there seems to have been a slight surge in interest, which we are praying continues into next week and beyond.”

Hamptons International, another estate agency, said it also had a European buyer rush to agree a purchase in Chelsea to make the most of the drop in sterling.

The behaviour of investment banks over the next few days and weeks will be closely watched; not just how they trade, but where they plan to base themselves in future.

The BBC earlier reported that Morgan Stanley, one of the biggest US banks in London, is making plans that could shift 2000 staff from London to Dublin or Frankfurt. But Morgan Stanley’s denials are strong. Now there is an internal memo to staff from James Gorman, the chairman and chief executive, which says:

“Despite inaccurate media reports, we have no plans in place to move staff out of the UK and will only consider adjustments to our operating model in EMEA as the full impact of the referendum outcome becomes more clear over the course of the next two years.”

This does not say never, however. Morgan Stanley’s stock is down around 9 per cent in New York, one of the larger fallers of the day.

Is there a correlation between places that voted for Brexit, and economies that have been falling behind in recent years? Not according to this smart blog from Torsten Bell, director of the Resolution Foundation think tank.

As Bell notes: “There is no relationship between how an area’s prosperity changed in recent years and how they voted. That is to say some areas with big pay boosts voted to leave (such as Christchurch in Dorset) and some that have done very badly out of the last decade and a half still voted to stay in the EU (such as Rushcliffe in Nottinghamshire).”

But there IS a strong correlation between wage levels and the Brexit vote.

Bell concludes:

So it’s not the unequal impact of the recent recession driving voting patterns – or indeed as some argue the impact of migration driving down wages in some areas. Instead, in so far as economics drove voters’ behaviour last night, it is areas that are, and have been for some time, poorer. Or to put it another way, it’s the shape of our long lasting and deeply entrenched national geographical inequality that drove differences in voting patterns.

Bruised, bewildered traders in London can perhaps take heart that the four horseman who came riding over the hill this morning by evening appear marginally less menacing — say, one and a half horsemen, or one horseman and one on a donkey.

Rochelle Toplensky on the FT’s market desk in London reports that the FTSE 100 closed down 3.2 per cent at 6,138.69, having earlier been down 8 per cent. The biggest losers are banks , then life/health insurance and home-building. The biggest winner is pharma. The FTSE 250 was 7.08 per cent down in closing trade at 16,106.81, having been off by as much as 12 per cent. Gold and precious metals did well; asset managers and home-builders did not.

The FT’s Bryce Elder points out that Sterling’s slump means the FTSE 100 outperformed world markets. But that told only half the story. Priced in dollars, the FTSE 100 tumbled 10.9 per cent. The daily loss was second only to its Black Monday crash of 1987, which sent the benchmark plunging 12.2 per cent in dollar terms.

Trading volumes were at record levels. Nearly 7bn blue-chip shares had been exchanged by the close against an average daily volume of 1.5bn, Bloomberg data show.

The green blues are descending, reports Pilita Clark, the FT’s environment correspondent.

Europe’s carbon market suffered its biggest one-day fall in more than two years on Friday as the UK’s vote to leave the EU sparked widespread confusion about the future of the bloc’s climate change policies.

Benchmark prices in the EU emissions trading scheme, Europe’s flagship policy to combat global warming, sank by as much as 17 per cent amid speculation the UK could pull out of the system.

The result also prompted Ian Duncan, the Conservative Scottish MEP who had been handling efforts to strengthen the scheme in the European Parliament, to resign from the role.

“These developments have thrown the market into disarray,” said Louis Redshaw, managing director of London carbon market firm, Redshaw Advisors. “You’ve got companies not knowing what they should or shouldn’t do.”

The political turmoil surrounding the vote, which prompted the resignation of the prime minister, David Cameron, has also led to uncertainty about the UK’s own climate change policies.

Many leading figures in the campaign to leave the EU are sceptical about the cost of measures to cut carbon emissions, including former Tory chancellor, Lord Lawson, and former environment secretary, Owen Paterson.

An early test of Britain’s new political landscape may come next week, when ministers are due to approve new greenhouse gas reduction targets under the UK’s Climate Change Act.

The government’s climate advisers say the UK should aim for a 57 per cent cut in emissions by the early 2030s but it is not clear if pro-leave Conservative MPs emboldened by Thursday’s vote will accept such a move.

Thursday’s vote has also raised questions about the UK’s leadership in EU climate change efforts.

“Today’s outcome is a major setback for the type of collaboration needed to tackle global environmental issues like climate change,” said Jonathan Grant a director at PwC, the professional services firm.

“The UK government has been a champion of climate action at home, within the EU, and in the Paris climate talks,” he added. “However this leadership is at risk, with many supporters of Brexit also opposed to climate policies such as carbon taxes and efficiency standards.”

Although the Paris climate accord agreed in December is unlikely to be immediately affected by the UK vote to leave the EU, it is not clear what it might mean for other measures such as the bloc’s planned renewable energy targets for 2030.

The head of some big renewable power companies tried to play down fears on Friday that the UK vote could weaken the EU’s climate and energy agenda.

The chief executive of Italy’s Enel energy group, Francesco Starace, said he did not believe the move would affect the energy market as a whole. But he said companies like his needed to know how the UK and Europe planned to proceed in coming months.

“For us, at this moment, the most important fact is really to know what steps are going to be taken, in what kind of order, and what kind of process we are going to face,” Mr Starace told Bloomberg Television in Rome.

As Bryce pointed out (see below), the FTSE’s relative recovery since 8am is a little illusory: once you factor in the fall in the pound, its daily move is still pretty atrocious. Here is a chart of the FTSE, valued in dollars:

The blue line is the FTSE in dollars, the orange line the daily change in this.

Note a couple of things however. One, there was a fairly shocking UPWARDS move on Monday, when the polls all swung to Remain. Two, relatedly, the level of this index is still therefore above its recent lows, reached in February.

However, note that most markets have recovered a long way since February. So, bottom line, the verdict from the markets is that this event has made UK-listed companies much less valuable. And, as a Lex note later will make clear, the performance of smaller stocks in the FTSE 250 is much worse. The 250 is down 7% today, or in dollar terms, some nasty double-digit number.

Europe is dead. Long live Europe?

So says Der Spiegel, the German magazine, on its cover. That is one of the more momentous question marks.

The oil price might be sliding, taking the share prices of some of the world’s biggest oil companies with it, but some have today pledged their commitment to their UK operations.

BP said in a statement earlier today:

It is far too early to understand the detailed implications of this decision.

However, we do not currently expect it to have a significant impact on BP’s business or investments in the UK and continental Europe, nor on the location of our headquarters or our staff.

However ExxonMobil, the world’s biggest oil company, which employs 7,500 staff and contractors in the UK, sounded less definitive in a statement it has released. Ed Crooks, our US energy editor, sends this update from the company:

ExxonMobil respects the democratic process. Our investment decisions are based on a wide range of factors which include, but are not limited to, the political climate.

The barrier-free movement of goods, people and capital across borders is important for a business like ours with operations across Europe.


An alliance of senior MEPs have called for the UK’s commissioner to be stripped of his influential role overseeing the EU’s financial services regulations, reports the FT’s Duncan Robinson in Brussels.

In a draft motion seen by the Financial Times, the MEPs call on the president of the European Commission “to reallocate the portfolio” of Tory peer Lord Hill “with immediate effect”.

The motion, which is backed by the leaders of Greens, Liberals and Socialists, as well as the centre-right EPP, also calls on David Cameron to activate “immediately” the legal procedure required for Britain to leave the EU.

British MEPs are also coming under pressure to stand aside from their roles of shepherding legislation through the parliament, according to parliament officials.

Barack Obama famously said earlier this year that the UK would end up at the “back of the queue” if it wanted to reach a trade deal with the US should Britons vote to leave the EU.

Now that British voters have done exactly that, the Obama administration is being more cautious in its language, reports Shawn Donnan, the FT’s world trade editor.

It is also weighing the impact on a mooted trade deal with the EU, the Transatlantic Trade and Investment Partnership, that Mr Obama had hoped to conclude negotiations on before he leaves office.

In a statement Mr Obama’s trade tsar, Mike Froman, on Friday said:

“The importance of trade and investment is indisputable in our relationships with both the European Union and the United Kingdom. The economic and strategic rationale for TTIP remains strong. We are evaluating the impact of the United Kingdom’s decision on TTIP and look forward to continuing our engagement with the European Union and our relations with the United Kingdom.”

Mr Froman declined to address the possibility of a US-UK trade agreement being hatched some day. But that is because US officials believe any such deal would be years away at best. And that the UK would first have to determine what its trading relationship is to be with the EU.

John Burn-Murdoch has written a fascinating post examining the demographics of those who voted Leave here.

Here are some of the charts he has drawn up, which tell a clear story:

Emoticon It’s humiliation time for David Cameron in Brussels next week. Alex Barker, the FT’s Brussels bureau chief, has got his hands on a letter from Donald Tusk that confirms he will be excluding Cameron from the second day of the EU heads of state meeting on Wednesday next week. In diplomatic speak the key word is informally and the UK is the 28th member state that will not be there.

On Wednesday the 27 Heads of State or Government will meet informally to discuss the political and practical implications of ‘Brexit’. First of all, we will discuss the so called ‘divorce process’ as described in Art. 50 of the Treaty. And secondly, we will start a discussion on the future of the European Union with 27 Member States.

Before that, David Cameron will face an awkward dinner on Tuesday night with the other 27 head of government, where humble pie may well be on the menu.

Here is the full letter and a link if you need a clearer copy to read

To New York, where US stocks were down in heavy but orderly selling at midday, report the FT’s Nicole Bullock and Joe Rennison.

The S&P 500 was off 3.2 per cent at 2,046.63, trading near the day’s lows. Financial company stocks, down 4.8 per cent, materials companies, down 3.9 per cent, and information technology, down 3.7 per cent, were the worst performing sectors on the day.

The yield on the 10-year US Treasury had fallen 18 basis points to 1.57 per cent.

The US dollar was up 1.8 per cent against major currencies, off the highs for the day, while gold had risen nearly 5 per cent to 1,315.69 an ounce and Brent crude oil was down 4.6 per cent at $48.55.

Sterling is at $1.37, down 7.5 per cent for the day.

Here’s the word from a treasury trading desk:

It’s actually been pretty orderly, much more orderly than I thought it would be.

The price spike in treasuries was overnight and since about 8am we have seen prices go lower as stocks have been firmer than overnight futures indicated. We all know that this Brexit will take time (actually years) to execute so maybe that is one reason for the muted response. Feels like this is a major blow to globalism – and has many people thinking (and saying) that Trump actually could get elected.

Volumes are pretty big, especially the overnight part of the session but have definitely quieted down. These are the kind of days (maybes weeks) where traders care mostly about preservation of capital not return on capital.

Robert Bernstone, managing director in equity trading at Credit Suisse, says:

Markets as a rule don’t like uncertainty. There are some questions about how this will play out, so the knee-jerk reaction is risk off. We are not seeing panic. We are seeing sellers, but also some buyers. It is not nearly as panicky or disorderly as back in August [when fears over Chinese growth led to a wild day’s trading].

Daniel Katzive, head of FX strategy for North America at BNP Paribas, says:

Things are stabilising a bit but I would not take that to mean we have seen the extent of the impact yet. I think the main thing to watch for now is Bank of England reaction. If they ease policy that will negatively affect the pound and we expect them to do that.

I believe that the market was better protected for an exit vote a month or so ago. A large short sterling position, the market had a hedge. But the three episodes of polls shifting in favour of remain cleared out a lot of those hedges, a lot of that protection.

A lot of investors will use this result as a reason to get bearish on the euro on the theory that there will be political repercussions for the eurozone and I would expect short positioning on the euro to build significantly. The caveat we would add is that the political consequences will build over time. This is not immediate. And Europe has a big current account surplus now, which means the euro tends to appreciate during stressed periods, which is an impediment to a lower euro even if people are bearish.

David Cameron is expected to mak a statement to MPs when they return from Parliamentary recess on Monday and then take questions but nothing has been confirmed at present. As it stands the Cabinet Office that said “nothing has changed yet” in the Commons diary but the FT’s political editor George Parker says it is inconceivable the prime minister would not address the House.

President Barack Obama has spoken about Britain’s impending departure from the EU – having been one of the most prominent foreign leaders to back remain, reports Hannah Kuchler in San Francisco.

The president said he is confident that the UK is committed to an “orderly transition” out of the EU, promising the special relationship between the US and the US will endure.

Mr Obama said he spoke to UK prime minister David Cameron a few hours ago, praising him as an “outstanding friend and partner on the global stage”. US and UK financial and economic teams will now work closely together as the union is split, the President said.

President Obama said he also spoke to Angela Merkel, the German Chancellor, and agreed that the US and its EU allies will work closely together.

“Our shared values, our commitment to democracy and pluralism continue to unite all of us,” the President said at a speech in Silicon Valley.

Earlier in the day, the White House had issued a statement saying it respected the decision of the British people.

Before the election, President Obama had warned the UK that leaving the EU would force it to the “back of the queue” when seeking a trade deal with the US. On a visit to London in April, President Obama said the UK would less secure, less influential and less prosperous if it left the union.

The President is speaking on stage at his Global Entrepreneurship Summit with Penny Pritzker, Secretary of Commerce, Mark Zuckerberg, Facebook founder and chief executive and other technology leaders.

Nick Clegg has written an impassioned piece for the FT about how needless this referendum was and why David Cameron and George Osborne are to blame for the outcome.

This passage in particular catches the eye:

My greatest anger is reserved for David Cameron and George Osborne — notwithstanding the dignity of the prime minister’s resignation. They and they alone are responsible for bringing our great country to this sorry pass.

This need never have happened. When we were in coalition with the Conservatives I was repeatedly asked by them to agree to a referendum on their terms.

There are two problems with this line of reasoning however:

1) Nick Clegg himself promised an in/out referendum in 2010.
2) From everything my sources told me before the election, Nick Clegg was willing to accept this referendum had there been any coalition talks with the Tories in 2015. In return he would have asked for constitutional change such as allowing proportional voting for local government.

Buyer’s remorse in Clacton-on-Sea? Rick Mertens reports.

Daryl Hinds, 46, who owns The Sea Breeze Diner in the Essex town, had second thoughts about the Leave vote he cast yesterday when he read the news this morning.

“Now that I’ve seen that the pound has dropped I’m not so sure any more. What will it mean for small businesses like mine?” he wondered. “Hopefully it’s a good thing.”

Tendring, which includes Clacton, is the constituency of UKIP’s sole MP, Douglas Carswell. In the referendum, 69.5 per cent of voters voted to leave the EU.

Ernie, 70, who sells souvenirs in the Lifeboats shed on Clacton Pier, was also taken aback when he heard that the side he voted for was in the lead. “I was shocked. I know everyone said before that they’ll vote to leave, but to be honest I didn’t think it was going to happen. I was also quite surprised that Cameron resigned.”

Fred Varlew, 81 (below, left), said he jumped out of bed this morning. “Finally, we got our country back! Yeah!” he said, sunbathing on the pier. The market turmoil that ensued did not worry him. “I’m convinced that the pound will finally bounce back. I hope the French and the Dutch will now get a vote on it as well.” Jo Hamondsley (below, right), sitting alongside his friend in the sunshine, nodded his approval.

Others were more wary of leaving the EU. “We’ve been in it for so many years now and I feel that we should go on with it now,” said Hannah Kinsella, 25, who works as a studio photographer in London. “I would have preferred the stability we have to the uncertainty we get now,” she said, pushing a pram past the amusements.

In case you missed the report earlier in the day, Airbus, the European aerospace group, which shares an effective duopoly with Boeing in the market for large civil jets, has sought to reassure Britain that its UK operations are safe, at least for now. Airbus has its main wing-making facility for all its aircraft in Broughton in north Wales, just over the English border from Chester, and at Filton near Bristol.

Airbus makes the main parts of all jets at various plant across Europe, chiefly in Germany, the UK, Spain and France before putting them together at final assembly lines in France, Germany and China and the US. But it is the wing manufacturing that is among the most technically demanding and high value parts of the aircraft and Germany has long eyed that technology and has attempted to get at least some of it from the UK in the past.

Follow this link for the full story

And here’s our front page for tomorrow. A collector’s edition, this one:

And a slightly more irreverent one from Libération in France:

Anyone wanting to understand Article 50, the so-called EU exit clause, that the British government will probably activate at some over coming months, do have a read of this excellent explainer using annotated text by Alex Barker, the Brussels bureau chief:

One more front page, this time from the online-only Independent:

“At its heart, Leave was fuelled by a festering sense of betrayal among legions of working class voters in places that have long felt overlooked by what they perceive as a political and media elite in cosmopolitan London.”

So says Joshua Chaffin, an FT correspondent who has spent weeks traversing the UK trying to understand the urge to spurn the EU. Today he has filed this revealing dispatch.

We thought you might need a light-hearted moment after such a long day so here you go:

although I would point out that the one thing left that on the right of the table appears to be a tin of Heinz baked beans, which last time I checked was an American product, but perhaps that is where the UK-US special relationship comes in.

We have just checked on Wiki and indeed it appears baked beans have a storied history:

They were originally imported from American companies, first sold in the UK in 1886 in the upmarket Fortnum & Mason store in London as an expensive foreign delicacy.[6]

Edward Luce, the FT’s Washington commentator, suggest the US would do well do heed the lessons of Brexit for the upcoming presidential elections and not to paid to much heed to the political commentators predicting a landslide for Hillary Clinton, reminding everyone how similar Donald Trump’s campaign is to that of the Leave camp:

Before Brexit, US political commentators were cheerfully forecasting his landslide defeat to Mrs Clinton in November. By any conventional measure, Mr Trump ought to be hurtling to electoral disaster. Then again, much the same was said about Britain’s pro-Leave campaign. Like Mr Trump, their message was chaotic, economically risky, and flirted with the dark, xenophobic sentiments that we fondly believed were no longer acceptable in mainstream society.

Read the full piece here

We asked British expats from New York to Dubai what they made of Brexit. Misery, joy, trepidation… Listen to the podcast


Recep Tayyip Erdogan, Turkey’s president, has said the EU would inevitably face more countries leaving the bloc in the short term if it continues on the same path. Reuters quotes Erdogan saying the bloc was delaying Ankara’s efforts to join due to Islamophobia

Earlier today, Nicola Sturgeon, Scotland’s first minister, said she thought it was now “highly likely” there would be a second referendum on Scottish independence.

The SNP has long held the view that if Scotland voted to remain in the EU but was outvoted by the rest of the UK – as happened last night – this could prove a trigger for another vote.

But it is not inevitable.

Firstly, the SNP wants to keep its options open. So far, it has only said Scotland should “have the right to” hold another poll in the event of a Brexit vote. The wording is key. The party wants to hold a referendum at a time of its choosing, so that it can be sure it will win this one, as another defeat would end the prospect of independence for a generation at least.

My SNP sources say they want the opinion polls to be consistently 60/40 in favour of independence before calling for a vote. According to the latest polls, they are currently 48/41 against.

Secondly, it is not in the power of Holyrood to call a referendum. When the first one was called in 2014, Westminster had to first pass an order allowing it. This time around, a new prime minister could refuse, saying the Scots have only just had a vote on the issue – though that might risk alienating yet more Scottish voters.

After taking the most momentous decision for a generation, Britons appear to have turned to the internet to find our what they voted for…

The markets in New York have just closed. And here is a summary of a roller-coaster day’s trading from Eric Platt, our US Capital Markets Correspondent.

US stocks finished a bruising trading on Friday with the benchmark S&P 500 sliding 3.6 per cent to 2,037, the steepest one-day decline since last August, when a devaluation in the Chinese yuan sparked a deep sell-off in global markets.

The Dow Jones Industrial Average fell 3.4 per cent to 17,402 while the Nasdaq Composite declined 4.1 per cent to 4,708. The declines pushed the Nasdaq into a technical correction and erased the S&P 500′s gains for the year.

More than 14.5bn shares traded hands in New York on the NYSE, Nasdaq and Bats equity exchanges, the highest level since 2011 after Standard & Poor’s stripped the US of its long-held triple-A rating.

The final minutes of trading included the rebalancing of Russell Indices, with fund managers benchmarked to those indices adding and selling securities to match the new constituencies.

The yield on the 10-year US Treasury finished the day 18 basis points lower at 1.57 per cent. Yields fall as bond prices rise.

The US dollar climbed 2.1 per cent against its major trading partners as sterling slid 8.3 per cent to $1.365. Gold advanced 5 per cent to $1,317.95 an ounce while Brent crude oil fell 4.9 per cent to $48.44.

Adnan Akant, head of currencies at BNP Paribas Investment Partners, said:

We may have more uncertainty that leads to…more of a risk premium building into currencies and equity markets and credit spreads

Central banks and policymakers will be very cognisant of all that, but then again there are political choices being made and we will have to deal with that rationally.”

If you’re looking for good news in the markets then look no further than gold, or at least those that bought it at the right time via this blog courtesy of our colleagues on Alphaville:

There are some brilliant front pages on tomorrow’s newspapers. Here are another couple.

First the Guardian:

And secondly the Mirror:

Our reporter Emily Cadman is out and about and reports that a group of up to 100 demonstrators have gathered outside the head office of News International at London Bridge in what is a peaceful demonstration with lots of chanting and a bit of bongo playing. She could see one banner that reads: “Refugees Remain”. We assume the demonstration is aimed at The Sun, the UK’s highest circulation daily newspaper, after the tabloid came out in support of Brexit just before the referendum. The police clearly aren’t taking any chances and are out in force:

Unthinkable as it may seem, some people are suggesting there could be a second EU referendum as the consequences of this one become clear.

Jonathan Powell, Tony Blair’s chief of staff, has been asked by the BBC’s Newsnight whether Boris Johnson should negotiate for a second referendum if he becomes prime minister. In an interview which airs at 1.30 tonight, Mr Powell said:

It seems very unlikely at the moment, the EU saying no to it, the Brexit campaign saying no to it, but that is one option when we go forward and when people realise quite how ghastly the alternatives are.

David Cameron and Barack Obama have been keen in the past to play up how close their relationship is. A call between the two men earlier today – possibly the last while Mr Cameron is prime minister – sounds like it may have been painful.

Here is the White House readout of the call, via our US News Editor, Andrew Edgecliffe-Johnson.

President Obama spoke by phone today with Prime Minister David Cameron of the United Kingdom to discuss the outcome of yesterday’s referendum on membership in the European Union, in which a majority of British voters expressed their desire to leave the EU.

The president assured Prime Minister Cameron that, in spite of the outcome, the special relationship between the United States and the United Kingdom, along with the United Kingdom’s membership in Nato, remain vital cornerstones of US foreign, security, and economic policy.

The president also expressed his regret at the prime minister’s decision to step aside following a leadership transition and noted that the prime minister has been a trusted partner and friend, whose counsel and shared dedication to democratic values, the special relationship, and the transatlantic community are highly valued.

The president also observed that the EU, 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, will remain an indispensable partner of the United States.

The president and prime minister concurred that they are confident that the United Kingdom and the EU will negotiate a productive way forward to ensure financial stability, continued trade and investment, and the mutual prosperity they bring.

If the Leave campaign is to be believed, Brexit will allow the UK (or what remains of it) to extend the hand of friendship anew to the Anglophone world. Happy news, then, that our cousins across the Atlantic are thrilled with the result of the referendum. Well, at least one is…

This is from the email that Donald Trump sent to his supporters today.

These voters stood up for their nation – they put the United Kingdom first, and they took their country back.

With your help, we’re going to do the exact same thing on Election Day 2016 here in the United States of America.

I am fighting to upend the failed Big Government status quo in Washington, so that Americans can start believing in the future of our country again. And if elected President of the United States, I will strengthen our ties with a free and independent Britain.

Moody’s, the credit ratings agency, has warned it may cut the UK’s credit rating as a result of yesterday’s vote. This comes after S&P warned earlier today that it felt Britain’s AAA rating was “untenable under the circumstances”.

More details can be found on FastFT at this link.

I think this is what you call knowing your readers.

From New York, the FT’s Eric Platt and Gregory Meyer report that speculators increased net bullish bets on US 10-year Treasury notes and got more bearish on sterling in the days ahead of the UK’s historic vote to exit the EU.

Data released late Friday by the US Commodity Futures Trading Commission showed non-commercial traders such as hedge funds had net bullish holdings of 114,665 futures contracts in the benchmark Treasuries as of Tuesday, the biggest position since April 2013. The figure is the difference between long and short positions on Chicago’s futures bourse.

Asset managers and institutional investors built up their net bullish position, but they were partly offset by hedge funds, which increased their net selling position in 10-year notes in the week to Tuesday.

Speculators also increased net bearish bets on the British pound by 15,286 contracts to 51,947 in the week to Tuesday, CFTC data showed.

The snapshot preceded a mild rally in sterling and in riskier assets like US stocks on Thursday as several polls indicated the Remain campaign had gathered momentum and appeared set for victory.

Those surveys prompted a brief rally in the pound, which eclipsed $1.50 against the dollar before the first votes in the UK referendum were counted. The win by the Leave campaign unravelled that bet, with the pound falling more than 8 per cent on Friday to $1.37.

According to The Sun, Boris Johnson, the bookies odds on favourite to become the UK’s next prime minister is planning to join his family for a cricket match tomorrow. It is unclear whether that is to watch a game or actually play but if it’s the latter we wonder whether his father Stanley, a Remain supporter, might provide the opposition;

For all the great newspaper front pages we’ve had this evening, this cover from the New Yorker is right up there. No words needed.

The FT’s Sarah Gordon has been talking to business people all day to understand the impact of the vote. Companies’ main complaint is over the uncertainty that will now ensue, an uncertainty which has been compounded by David Cameron’s decision to resign and to not trigger Article 50 negotiations until the autumn.

Sir Roger Carr, chairman of BAE Systems, the UK’s largest defence company, said the picture for all business until October was a “balance of difficult challenges”. He warned:

A PM in power whose position clearly differs from the decision of the country and an unknown leader in waiting who is yet to be selected for office [means] an uncertain summer for both business and the nation. For some months in the country at large it’s not going to be business as usual.

Mike Cherry, director of policy at the Federation of Small Businesses, said his organisation would be “reflecting over the weekend on our priorities for our members and what we can do when we know who is actually going to be leading on this for the government”.

Investment and hiring decisions that had been put on hold before the referendum may remain on hold, warned Simon Walker, director-general of the Institute of Directors. He also said he was worried that business would find it difficult to get the ear of politicians, or even the civil service, over the next few months.

I am worried about business getting its priorities over. A lot of things have been put on hold and the likelihood is that the leadership contest will prolong all that.

Mr Walker pointed out that many of the IoD’s members exported “relatively arcane” products, such as whisky to South Korea. These exports, outside the EU, would be subject to 50 per cent tariffs.

How long is it going to take before negotiators get round to whisky exports to South Korea? The tremors [from this decision] are going to go on for years.

Amid all the high political and market drama caused by Brexit, the focus of many in Europe will switch back to the European Championship football tournament that starts again on Saturday with the first of the last 16 knockout games. Inevitably, the English footballer put up in front of the cameras to talk to the press of Friday, in this case striker Harry Kane, was asked by journalists what he thought of the decision of the British people to leave the EU.

“I don’t think the lads are too focused on it to be honest,” was the response of the Tottenham striker, who finished as the top scorer in the English Premier League last season.

In contrast, Italian defender Giorgio Chiellini, said he was stunned and continued:

The main concern should be about an eventual domino effect caused by this decision. I don’t think that a simple UK exit can change the equilibrium of the whole European economy, or the world economy, aside from the heartburn everybody’s feeling these days.

This vote is the symbol of a general discussion that you can feel in Italy and all across Europe, but I think that discontent shouldn’t lead to a vote for disintegration.

Chiellini (pictured above right, playing against Sweden earlier this month) should have some insight into these matters with a degree in business and economics from the University of Turin.

A shot across the bows of the City from the president of the eurogroup, as reported by Reuters.

British financial institutions’ access to the European Union’s internal market will be more limited after the country leaves the European Union, the chair of the council of eurozone finance ministers said, adding that some would leave London’s City.

Speaking on RTL television, Dutch finance minister Jeroen Dijsselbloem said that limited access was the “price” of Britain’s leaving the bloc, and that rival financial centres like Amsterdam and Frankfurt would benefit.

“A few years ago, London took out adverts in the Asian edition of the Financial Times saying it was the place to come if you wanted to do business in the EU,” he said. “Now they can’t place that advert, and the Asians will go to Amsterdam or Frankfurt instead.”

A potential boon for the Dutch, Dijsselbloem seems to suggest, if it spurns calls for its own EU referendum.

Here’s the Daily Telegraph front page, which not surprisingly strikes an upbeat tone given its support for Brexit, although the headline does clash slightly with the striking cover picture:

The Institute of Public Policy Research think tank has warned about the consequences of a Brexit-related rise in inflation for poorer households.

According to the IPPR’s research, which relies on Treasury modelling, a 2.3 per cent increase in CPI increases costs for the poorest households by 3.3 per cent, but only 1.6 per cent for the richest 10 per cent.

Here is the chart which shows this:

Catherine Colebrook, the IPPR’s chief economist said:

Markets have responded to the news that the UK is to exit the EU by selling sterling assets, causing the pound to fall. This will be felt in higher costs on the high street in the coming months.

Because poorer families spend a higher proportion of their disposable income, the poorest 10 per cent of households will be hit the hardest by these developments.

This just in from the FT’s Mary Childs in New York:

Markets functioned well in the fraught first day of trading after the UK’s unexpected vote to leave the EU, but remain vulnerable should a financial “accident” come to light in the coming days, according to Scott Minerd, global chief investment officer at Guggenheim Securities, which oversees about $240bn of investments.

Speaking on Friday afternoon following a meeting of the New York Federal Reserve’s Investor Advisory Committee on Financial Markets, Mr Minerd said its discussion focused on possible follow-on effects, including concern that the referendum might be “the beginning of the end of the EU,” with other countries threatening to follow suit and potentially breaking up the union.

“I doubt we’ve seen a bottom of the selloff. Today is nowhere near as bad as what I expected or what many people at the Fed expected: you’d have thought there would be a more fantastic down-drafting of US stocks and other assets,” Mr Minerd said. He added, however: “We’re vulnerable next week to some sort of additional downside selling, especially if we discover there’s some sort of financial accident somewhere we’re going to have to deal with.”

The UK vote sparked a steep fall in the pound and a significant but smaller drop in global stock markets, testing the market’s ability to handle significant selling after years of banks and investors complaining that regulations had thinned trading volumes. But even as volumes surged to six times average levels in some asset classes, “the fact that the market functioned so well was reassuring,” Mr Minerd said.

“The Fed acknowledged that the liquidity of the markets was not impaired as a basis of any regulatory change in the framework,” he said. “That’s one of the things you’ve heard all day long from traders – it was a very orderly market. The orderly market was a result of having a sufficient amount of liquidity in the system.”

His comments were echoed by the US Treasury’s Financial Stability Oversight Council, which issued a statement late on Friday noting that “the US financial system continues to function in an orderly manner”, and saying it would continue to monitor developments.

Mr Minerd said market participants had priced in the expectation that the UK would remain in the EU, which could hurt the many hedge funds that bet on staying, but any pain has yet to surface.

“I talked about my concern that there was something out there lurking in the darkness like [the 1998 Long-Term Capital Management crisis] or a financial institution of some kind who might be in trouble but we don’t know about it yet that could lead to bigger systemic problems,” he said. “The margin calls will start at some point and that will put more downwards pressure on stocks, and we’ll see that next week.”

It has been a momentous day in British and European politics with repercussions felt around the world as financial markets were hit sharply. The UK is set to quit the EU after 43 years but it will happen under a new prime minister, after the incumbent David Cameron said he would stand down by the time of his Conservative party’s annual conference in October.

The EU has said it will begin planning for a Brexit as early as next week and is pushing London to trigger Article 50, the so-called release clause.

Meanwhile, the break-up of the UK is also back on the agenda after Nicola Sturgeon, leader of the Scottish National Party, which rules Scotland, says she will prepare for a new referendum on Independence.

Most of the country had turned against the EU with only London, Scotland and Northern Ireland delivering big wins for Remain.

We are going to close this blog for the night and will return on Saturday morning UK time.