Featured # Markets | 3 years ago

Global Markets Plunge As Britain Exits EU

The resignation of Prime Minister David Cameron has been announced after Britain voted to leave the European Union. This was on of the biggest blows to the EU and Uk economies as of World War Two. Global stock markets came crashing down Friday – June 24, 2016 – as the final results from the poll came in showing a 52-48 vote victory for the “Leave” campaign as they are to depart from the EU (something they were apart for more than 40 years). The exchange rate of the pound fell as much as 10 percent against the dollar to reach levels seen last in 1985; investors feared this decision would devastate the world’s fifth-largest economy: threatening London’s role as a global financial capital and its political mind. Billions of dollars were lost by European Companies as world markets headed for one of the biggest slumps on record. The big banks of Britain took a $130 billion hit, with Lloyds and Barclays falling as much as 30 percent before the opening of trade this morning.

Nearly two-thirds of voters wanted to stay in the EU, a new referendum on independence from the rest of Britain was “highly likely”. The United Kingdom was now, with the leader of Scotland the piece of the puzzle broken. Cameron – leader of the “Remain” campaign” was very emotional to the result of this vote. He finally lost the gamble he took three years ago when he called this referendum; he has announced he will be stepping down from office this October. Outside his house in a televised news conference, Cameron stated: “the British people have made the very clear decision to take a different path and as such I think the country requires fresh leadership to take it in this direction.” As he was holding back tears he left with his arm around his wife Samantha, he concluded his address to the media saying “I do not think it would be right for me to be the captain that steers our country to its next destination.”

As a result, departing from the EU could cost Britain access to the EU’s trade barrier-free single market and meaning it needs to seek new trade pacts with countries around the world. The EU will be economically and politically damaged for a while, with the departure of a member of its biggest financial center and powerful army and nuclear weapons, the EU has lost a double edge sword. So in one go, the bloc will lose around a sixth of its economic output.

“It’s an explosive shock. At stake is the break up pure and simple of the Union,” French Prime Minister Manuel Valls stated. “Now is the time to invent another Europe.”


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