Daily Times

LONDON: British markets plunged on Friday, with sterling hitting a 31-year low in its biggest fall on record and UK stock futures pointing to a steep fall at the market open after Britons voted to leave the European Union. Bonds also sold off sharply, pushing UK government borrowing costs sharply higher, as traders and investors grappled with the market implications of ‘Brexit’.

The pound had hit a 2016 high above $1.50 after an earlier opinion poll showed an outcome in favour of ‘Remain’, but fell nearly 17 cents from that peak as area counts came in and TV stations said the Brexit camp had won the landmark referendum. The British currency’s fall of almost 10 per cent was also 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. “It’s back to the future, we’re back to where we were in 1985,” said Nick Parsons, co-head of global currency strategy at NAB. “We’ve had a 10 per cent decline in six hours. That’s simply extraordinary, and a vote to leave provides an existential crisis for Europe,” he said. Sterling fell as low as $1.3305, its weakest level against the dollar since September 1985. It fell 6pc against the euro and 15pc against the yen .