Britain votes to leave EU in historic referendum

World financial markets dived as complete results showed a 51.9/48.1 percent split in favour of the UK leaving the EU.

Photo by: Reuters
Photo by: Reuters

Leave supporters cheer results at a party after polling stations closed in the Referendum on the European Union in London.

Britain has voted to leave the European Union in a historic referendum which could potentially trigger the collapse of the 28-nation bloc and have far-reaching economic consequences.

The vote will initiate at least two years of a messy separation from the EU, raise questions over London's role as a global financial capital and has already forced Prime Minister David Cameron to resign, even after he had pledged during the campaign to stay on whatever the result.

Cameron had urged Britons to vote Remain, warning that the alternative was a leap in the dark that would hurt trade and investment, bring about a self-inflicted recession, undermine the pound and push up shopping bills and the cost of holidays.

The world financial markets were already experiencing the effects of Britain's vote as results from the referendum showed a 51.9/48.1 percent split for leaving. 

The pound suffered its biggest one-day fall of more than 10 percent against the dollar, hitting a 31-year low on market fears that the decision will hit investment in the world's fifth largest economy.

Advocates of going it alone said a 'Brexit' would invigorate the economy by freeing business from suffocating EU bureaucracy, and allow the country to recover its sovereignty and regain control of immigration.

Britain's 27 EU partners anxiously watched the vote, fearing the departure of the bloc's second biggest economy would weaken Europe's global clout and fuel the rise of eurosceptic movements in other countries.

Flags fly outside Europe House, the European Parliament's British offices, in central London, with European flag, right, and Britain's Union flag, Tuesday June 21, 2016.

Plunging Pound

The pound had hit a 2016 high above $1.50 shortly after an earlier opinion poll showed an outcome in favour of 'Remain', but fell nearly 17 cents from that peak as it became clear that the 'Leave' camp had won the landmark referendum.

The British currency's fall of almost 10 percent was historic, marking a decline greater than anything seen since free-floating system of exchange rates was introduced in the early 1970s.

It was even bigger than on 'Black Wednesday' in 1992, when billionaire financier George Soros was instrumental in pushing the pound out of the Exchange Rate Mechanism.

London bankers working through the night said they hadn't seen anything like the volatility sweeping across UK assets.

"The word 'unprecedented' is often used too much, and people often reach for the hyperbole. But this is truly unprecedented," said Steven Major, head of global rates strategy at HSBC in London.

Betting odds for the the EU referendum result are displayed in a betting shop in Westminster, London, Thursday, June 23, 2016.

Opinion polls had earlier put Remain in the lead by margins of 52-48 or 54-46 percent.

Financial markets had initially been reassured by opinion polls showing a likely win for 'Remain', and by comments from prominent anti-EU campaigners - including Nigel Farage, head of the UK Independence Party and Government minister Theresa Villiers - that they expected to lose.

Farage later tweeted: "I now dare to dream that the dawn is coming up on an independent United Kingdom."