Results from across the country suggesting the Brexit camp were on the brink of declaring a referendum victory saw sterling down 10% against the dollar. The value of sterling slumped to a 31-year low on currency markets and was on course for its biggest one-day loss in history as panicking investors contemplated the prospect of a vote to leave the European Union.
Live More than £100bn wiped off FTSE 100 after UK votes for Brexit – live updates.
Results from across the country suggesting the Brexit camp was on the brink of declaring a referendum victory led to sterling reversing initial gains to leave the pound down more than 10% at $1.33, compared with $1.50 just after polling stations closed. That was the lowest since 1985. The pound was down more than 7% against the euro.
With markets braced for turmoil over the coming days, safer assets such as gold were in high demand. The precious metal, a long-time favourite investment in uncertain times, soared as much as 7% at one point.
The pound’s fall, which stunned investors, was its biggest ever one-day fall, and ranked with the reaction to the collapse of Lehman Brothers in 2008 and Britain’s exit in 1992 from the European exchange rate mechanism on Black Wednesday.
Traders were expecting the FTSE 100 share index to mirror the pound’s sharp losses with potentially more than £100bn wiped off shares. The market does not open till 8am, but spread betting firm IG is calling the FTSE 100 down by more than 450 points and Wall Street off by more than 600 points.
Spread-betting and trading firm CMC Markets UK was calling the FTSE 100 down 468 points from its overnight close of 6,338 at 5,870. Its chief market analyst, Michael Hewson, said the consequences of the vote looked set to “ripple across the EU and the world”.
“Banking stocks are likely to be a particular concern given the weakness of the banking sector in Europe and the linkages between the UK and Europe,” he added.