Brexit vote sends markets reeling

Associated Press

LONDON

Britain has jumped. Now it is wildly searching for the parachute.

The U.K.’s unprecedented decision to leave the European Union sent shock waves through the country and around the world Friday, rocking financial markets, toppling Prime Minister David Cameron and even threatening the ties that bind the United Kingdom.

Britons absorbed the overwhelming realization that their anti- establishment vote has pushed the British economy into treacherous and uncertain territory and sparked a profound crisis for a bloc founded to unify Europe after the devastation of World War II.

“Leave” campaigners hailed the result as a victory for British democracy against the bureaucratic behemoth of the EU.

Conservative former London Mayor Boris Johnson said “the British people have spoken up for democracy in Britain and across Europe,” while Nigel Farage, leader of the hard-right U.K. Independence Party, said “the dawn is breaking on an independent United Kingdom.”

But for the 48 percent of British voters who wanted to remain – and for the 2 million EU nationals who live and work in Britain, but could not vote – there was sadness, anger and even panic.

At a London train station, commuter Olivia Sangster-Bullers called the result “absolutely disgusting.”

“Good luck to all of us, I say, especially those trying to build a future with our children,” she said.

The decision launches a yearslong process to renegotiate trade, business and political links between the U.K. and what will become a 27-nation bloc, an unprecedented divorce that could take a decade or more to complete.

Cameron, who had led the campaign to keep Britain in the EU, said he would resign by October and left it to his successor to decide when to invoke Article 50, which triggers a departure from European Union.

“I will do everything I can as prime minister to steady the ship over the coming weeks and months,” a somber Cameron said outside 10 Downing St. “But I do not think it would be right for me to try to be the captain that steers the country to its next destination.”

He also said he had spoken to Queen Elizabeth II “to advise her of the steps that I am taking.”

In a referendum marked by notably high turnout – 72 percent of the more than 46 million registered voters – “leave” won with 52 percent of the votes.

Stock markets plummeted around the world, with key indexes dropping more than 12 percent in Germany and about 8 percent in Japan and Britain. Markets calmed and later recovered some of their losses after Bank of England Governor Mark Carney promised to take “all the necessary steps to prepare for today’s events.”

The Dow Jones industrial average dropped 611 points, or 3.4 percent, its biggest fall since August.

The euro fell against the dollar and the pound dropped to its lowest level since 1985, plunging more than 10 percent from about $1.50 to $1.35 before a slight recovery, on concerns that severing ties with the single market will hurt the U.K. economy and undermine London’s position as a global financial center.

The referendum result revealed Britain to be a sharply divided nation: Strong pro-EU votes in the economic and cultural powerhouse of London and semi-autonomous Scotland were countered by sweeping anti-establishment sentiment for an exit across the rest of England, from southern seaside towns to rust-belt former industrial powerhouses in the north.

For many who voted “leave,” the act was a rebellion against the political, economic and social establishment and the derided “experts” – including CEOs, artists, scientists and soldiers – who had written open letters warning of the consequences of an EU exit, or Brexit.

Pro-Brexit voters were persuaded by the argument that leaving the EU meant taking back control of immigration – by abandoning the bloc’s principle of free movement among member states – and reclaiming billions that the U.K. pays to Brussels each year.

“Remain” supporters said this was a fantasy of sovereignty in an interconnected world, one that ignored the benefits the EU, and EU workers, bring to Britain.

But for many “leave” voters – who tended to be older, less well-educated and less well-off than the other side – the vote was reclaiming a birthright.

“It’s a vindication of 1,000 years of British democracy,” 62-year-old Jonathan Campbell James declared at the train station in Richmond, southwest London. “From Magna Carta all the way through to now, we’ve had a slow evolution of democracy, and this vote has vindicated the maturity and depth of the democracy in our country.”

The vote also represented a cultural and political populism stirring across Europe and beyond.