The verdict has fallen. The UK has voted to leave the European Union, with a majority of 52% of the votes being pro-Brexit. This moment will go down in history as David Cameron’s biggest mistake to date. In the meantime, Nigel Farage is jumping with joy, calling the 23 June ‘Independence Day’. Jessica Longley writes
A day of mayhem
Shock and bewilderment can be felt across the country as it seems no one expected a Brexit to actually happen, least of all the Leave supporters themselves. As the vote count started in the early hours of the morning, Farage predicted a Bremain whilst many Leave voters voiced their surprise at the referendum results on BBC news this morning.
As the markets opened to a flood of buyers and sellers at 8am in London, the UK’s PM David Cameron declared in a short and succinct speech he would resign but remain in office until October to leave room for a new leadership with a pro-Brexit voice. Cameron has made the decision to let his successor deal with the important task of activating article 50 of the Lisbon treaty, consequently delaying the two year window it gives the UK to negotiate its exit. Boris Johnson, who sent Cameron a letter "pleading" him to stay in office, has commented that there is ‘no haste’ to start Brexit process. However, Juncker and other European leaders intend to speed up Brexit, saying that the UK ‘must act on the vote as soon as possible’ to avoid prolonging uncertainty.
It is important to note that this referendum is technically not legally binding, unlike the previous Scottish Independence referendum. David Cameron has no legal obligation in implementing a Brexit even if faced with a Brexit majority, a fact often swept under the carpet and disregarded. That said, Cameron seems to have gone ahead with the public’s opinion and acted accordingly.
This first post-Brexit day has already thrown markets in turmoil and uncertainty, dragging down FTSE100 and FTSE250 shares to a dramatic low. Housebuilders, banks, airlines and retail stocks appear to be the biggest victims of Brexit so far, with Lloyds (down 20%) and Barclays (down 16.6%) topping the list of most traded shares on the FTSE100. However, in the last minutes of trading in London, the FTSE100 regained some ground to be down by 2.7%, or 175 points, considerably better than the 5806 it touched earlier this morning. Shares in New York have also fallen, with the Dow Jones industrial average dropping 2.1% while NASDAQ is 3.8% lower.
The Pound faced volatility as it found itself at a record low since 1989, dropping to $1.34 (down 7.5% against the dollar) and 1.22 (down 5% against the euro), whilst S&P announced that the UK would lose its triple A rating.
Furthermore, rumours that Morgan Stanley has set up a process that could see up to 2000 of its London-based investment banking staff being relocated to Dublin or Frankfurt have been brought to light. South African retailer Steinhoff is also further reviewing its takeover of Poundland, a discount chain.
These short term effects of Brexit may have a longer lasting effect on the UK’s economy, with experts fearing inflation and a potential recession. Brexit is expected to have a negative and detrimental impact on the cost of flights, healthcare, communication and visas.
Lies surrounding a major statement from the Leave campaign have also come to light this morning in an interview with Nigel Farage. Farage backtracked on a pledge made by the Leave campaign that £350m of European money will be spent on the NHS, stating that "this was a mistake".
Brexit met with a tense atmosphere
Several European Head of states have come out declaring their dismay and sadness at the result of the referendum, including Angela Merkel, Barack Obama and Francois Hollande. Others, however, have congratulated the UK and expressed how happy they were with the decision. Unsurprisingly, these include politicians with extreme views such as Trump and Marine LePen, the leader of the National Front in France, a Far Right political party. LePen tweeted "Victory for Freedom! It’s France’s turn now!". Russia and Iran have also indicated their delight at the UK’s rejection of the EU, with the Moscow mayor declaring: "There won’t be anyone to so zealously defend sanctions against us".
In London and Scotland, two areas in the UK to have voted with a majority Remain, there is a feeling of unfairness and frustration at the referendum’s outcome. In the case of Scotland, a future referendum on the independence of Scotland is "on the cards" according to Nicola Sturgeon. In London, a popular petition for a second EU referendum crashed in the middle of the day due to too many users on the site. A petition for the independence of London is also trending online whilst major gatherings in protest of Brexit are being organised as we speak on Facebook and other social media sites.
The young are feeling the most betrayed by their counterparts, 75% of them having voted to remain in the EU. A wave of frustration and helplessness can be felt among them as they feel the older generation has led to the downfall of their future. EU citizens studying in the UK fear that their university fees will soar and that they will be made to pay international fees instead of EU fees. Several higher education institutions, such as UCL, have however made statements that their current students will not face any changes in their visas or fees. Many feel a Brexit will drive international talent away from the UK.
Furthermore, Brexit has led to a spike in the number of people requesting an EU passport, with a high demand for Irish passports, in the hope of being able to access the benefits the EU offers.
The future is solemn at best
The future of the UK and the EU is uncertain at best, with several EU countries including France and Greece, to be faced with a potential EU referendum in the future. In the weeks to come, a clearer image of the UK and the EU’s future will be made available. Angela Merkel will meet on the 29th of June with Donald Tusk and Francois Hollande to discuss further the issue of Brexit.