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Pound tumbles to 30-year low as Brexit result agonisingly close

Last updated on: June 24, 2016 09:26 IST


At it worse, the fall was even larger than during the global financial crisis


upporters of leaving the European Union seized the lead on Friday in the vote count from Britain's bitterly contested referendum, setting sterling on track for its biggest ever fall on world markets.

The British currency fell as much nine percent to a 30-year-low below $1.35, marking a sharper dive even than on 'Black Wednesday' in 1992 when financier George Soros was instrumental in pushing the pound out of the Exchange Rate Mechanism that predated the euro.

In a mark of international concern, Japan's top currency diplomat Masatsugu Asakawa said he would consult with Finance Minister Taro Aso on how to respond to the market movements, describing them as very rough.

Bookmakers adjusted their odds to reflect the likelihood of a 'Brexit', with the Betfair Internet betting exchange putting that probability at 94 per cent as tallies showed the Leave camp doing better than expected across large swathes of the country.

Such an outcome would shake the European Union to its core, potentially fuelling the rise of anti-EU movements across the continent and marking the start of a two-year divorce process that would create uncertainty for companies and investors.

With results declared from 282 of 382 voting districts plus parts of Northern Ireland, Leave was ahead by 51.6 per cent to 48.4 in the referendum.

"I now dare to dream that the dawn is coming up on an independent United Kingdom," Nigel Farage, leader of the anti-EU UK Independence Party said.

He called on Prime Minister David Cameron to resign immediately in the event of a Leave vote.<?P>

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.

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 are anxiously watching the vote, fearing the departure of the bloc's second biggest economy would weaken Europe's unity and influence as it grapples with the Greek financial crisis and a massive influx of refugees.

Results showed those in favour of quitting the EU were strongly outperforming pollsters' expectations.

They scored close to 70 per cent of the vote in Hartlepool in northeast England and in Basildon, near London.

It was doubtful whether an expected pro-EU vote in the capital and across Scotland could redress the balance. In the London district of Haringey, 76 percent voted to remain.

"There is a disaffected vote," said John McDonnell, finance spokesman for the opposition Labour Party, which had favoured a vote to Remain but stood accused of not doing enough to mobilise voters in its northern strongholds.

"People are concerned about how they have been treated with austerity and how their wages have been frozen for about seven years.

"A lots of people's grievances have come out and we have got to start listening to them."

Leading political analyst and pollster John Curtice said: "At the moment, at least, we have more places where Leave are doing better than expected than places where Remain are doing better than expected, and if that pattern continues then Leave are going to win the referendum."


Financial markets had initially been reassured by opinion polls showing a likely win for 'Remain', and by comments from prominent anti-EU campaigners that they expected to lose.

Professor Vernon Bogdanor, a politics expert who tutored Cameron at Oxford University, told BBC television there was a possibility that Leave would win.

"One can't deny it's a real kick to the British establishment because all three party leaders have favoured a Remain vote, business on the whole favoured a Remain vote, the financial leaders have favoured a Remain vote. The people have not taken their advice," he said.

A vote to leave would send decades of European integration into reverse, marking the first time an independent nation has broken away.

It would threaten to open further cracks in a grouping already reeling from the financial and refugee crises.

Marred by the murder of a pro-EU UK politician, Jo Cox, who was shot and stabbed in the street a week ago, the campaign and its divisive rhetoric highlighted the populist wave also seeping into the US election race.

A Brexit vote would deal a potentially fatal blow to the career of Cameron, who called the referendum and campaigned for the country to stay in, against a Leave camp led by rivals from within his own Conservative Party.

"Thank you everyone who voted to keep Britain stronger, safer and better off in Europe -- and to the thousands of Remain campaigners around the UK," Cameron said on Facebook.

In a letter, 84 eurosceptic Conservative lawmakers called on Cameron to remain prime minister regardless of the result.

It marked the first attempt to heal the deep rifts that have opened up in the ruling party since the start of the campaign.

The signatories included prominent Leave campaigners Boris Johnson, the former mayor of London, and Michael Gove, a cabinet minister and personal friend of Cameron.

But despite the statement of loyalty, Cameron would face huge pressure from the country at large to step down as prime minister if Britons have defied him and voted to leave.

(Additional reporting by Estelle Shirbon, Sarah Young, Ana Nicolaci da Costa, Michael Holden, Freya Berry, Ian Chua, Wayne Cole and Michael Nienaber)

Photograph: Neil Hall/Reuters

Paul Sandle and Alistair Smout in London
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