Britain has voted in favor of leaving the European Union. As of Friday morning, the votes of 304 out of 382 areas had been counted and supporters of “Brexit” were leading by a margin of 51.5 to 48.5 percent. The news had dramatic effects on the world economy.
The British pound dropped by 10% and is now at its lowest level in three decades. At the same time FTSE 100 futures decreased by 8%. The euro slumped by 4% against the dollar. The value of gold spiked to $1,300 an ounce while the 10-year US Treasury yield fell towards 1.50%, the lowest level since 2012. US stock-index futures fell more than 3.5 per cent.
The shock wave made it all the way to Japan. The yen briefly exceeded the 100 yen to the dollar mark, before sliding down just below the ratio.
There are fears that the negative impacts will go beyond the economy.
“The main impact will be massive disorder in the E.U. system for the next two years,” said Thierry de Montbrial, founder and executive chairman of the French Institute of International Relations. “There will be huge political transition costs, on how to solve the British exit, and the risk of a domino effect or bank run from other countries that think of leaving.”
“Dare to dream that the dawn is breaking on an independent United Kingdom,” said Nigel Farage, leader of the eurosceptic UK Independence Party.
“If the predictions are right, this will be a victory for real people, a victory for ordinary people, a victory for decent people…Let June 23 go down in our history as our independence day.”