Brits' vote to leave EU causing shock waves to markets, similar calls across Europe

LONDON

The Bank of England says it’s ready to take “all necessary steps” to help keep Britain stable after voters chose to leave the 28-nation European Union.

The results of Thursday's vote have shaken global markets and caused the pound to tank, which will cause a slide in inflation, a major concern for the central bank. Investors are also poised to dump British stocks as soon as the market opens in London this morning (3 a.m. EDT).

The bank says it had prepared with extensive contingency planning and “is working closely with HM Treasury, other domestic authorities and overseas central banks.”

The bank says it will take “all necessary steps” to meet its responsibilities for monetary and fiscal stability.

The United States is reacting cautiously to the decision by Britain’s voters to bolt the 28-nation European Union, with a White House official saying only that President Barack Obama is being kept up to date on developments.

The official said Obama was expected to speak with British Prime Minister David Cameron “over the course of the next day.”

Obama had encouraged Britain to remain in the EU but said the decision ultimately was up to British voters.

Analysts are cutting their estimates for Britain’s economic growth after the vote to leav, ushering in a period of high uncertainty that is likely to shake businesses, consumers and markets for some time.

Howard Archer, the global economist for IHS Global Insight, says his research group is slashing its growth forecast for this year to 1.5 percent from 2.0 percent and, more dramatically, to 0.2 percent for next year from 2.4 percent previously.

Archer expects the Bank of England to switch from hoping to raise interest rates soon to cutting them by a quarter point to 0.25 percent before long.

He says: “Major economic and political uncertainty will be a fact of life for some considerable time, likely weighing down markedly on business and household confidence and behavior, so dampening corporate investment, employment and consumer spending.”

Analysts at Capital Economics have the same growth forecasts for 2016 but are more hopeful about 2017, seeing 1.5 percent growth.

Meanwhile, French far-right leader Marine Le Pen says there should be a similar referendum about EU membership in France after Britons voted to leave the 28-nation bloc.

“A victory for Freedom,” Le Pen tweeted. “We now need the same referendum in France and in EU nations.”

In the Netherlands, her ally Geert Wilders of the far-right PVV party also immediately called for a similar plebiscite.

Britons voted 52 percent to 48 percent on Thursday to leave the EU to take greater control of the country’s economy and its borders. The decision has shocked global markets and sent the pound plummeting to the lowest level in 31 years.

Top European Union officials are hunkering down in Brussels trying to work out how to navigate uncharted waters after the shocking decision by British voters to leave the 28-nation bloc.

European Commission President Jean-Claude Juncker is hosting talks today with the leaders of the European Council and Parliament, along with Dutch Prime Minister Mark Rutte, whose country holds the EU’s rotating presidency.

The four will try to agree a European position on the vote, which could see a member country leave the bloc for the first time ever, ahead of a summit of EU leaders in Brussels starting on Tuesday.

Parliamentary leaders were meeting separately, and European commissioners — the EU’s executive body — could hold separate talks later.

Shocked investors were ready to dump British stocks as soon as the market opens (3 a.m. EDT).

Futures for the benchmark stock index FTSE 100 are down 7.5 percent and the pound, which trades 24 hours a day, has already fallen to its lowest level since 1985.

The British currency was down 7.9 percent against the dollar at $1.3406, the lowest level in 31 years. It was down 5.1 percent against the euro, at 1.2193 euros.

Britain’s decision to leave the EU launches what will be years of negotiations over trade, business and political links with the EU.

The head of the biggest political bloc in the European Parliament says the U.K. vote to leave the EU is damaging but that the decision is for Britain, not the European Union.

European People’s Party chairman Manfred Weber says today that the vote “causes major damage to both sides, but in first line to the U.K.”

Weber added that “this was a British vote, not a European vote. People in the other states don’t want to leave Europe.”

One of the leaders of the victorious ‘leave’ campaign has reassured the European Union that Britain will continue to be a good neighbor.

Labour lawmaker Gisela Stuart, who was born in Germany, spoke in German to say that “Britain is an open society, it is a welcoming society and we will continue to be cooperating with European countries on an international level.”

As the British pound and global stock markets fell at the shocking result, Stuart says “it is incumbent on all of us to be very calm, remember that our responsibility is to the future of the United Kingdom, and work together to start a process.”

She says “in the long run, I think that both Europe and the United Kingdom will emerge stronger as a result.”

Dutch far-right leader Geert Wilders is calling for a plebiscite in the Netherlands about leaving the European Union after the British vote.

Wilders tweeted: “Hurrah for the British! Now it is our turn. Time for a Dutch referendum!”

EU officials have long suspected that a British decision to leave the bloc would be quickly claimed as a victory among the far left and right in European politics.

The British vote is considered a political earthquake that will shatter the stability of the continental unity forged after World War II.