Britain voted to break away from the European Union on Friday, shattering the unity of a 60-year-old continental bloc, prompting the exit of Prime Minister David Cameron and rattling the world of finance and business.
Uncertainty gripped London and Brussels as the British public voted 52% to 48% to leave the EU in a record turnout of 72%. Amid joy and dismay, the clearly dis-United Kingdom appeared set for choppy waters as it begins the process of extricating itself from the 28-member bloc by the end of 2018.
The historic vote triggered seismic tremors in equal measure in politics and business. Global financial markets plunged, the pound fell as much as 10% against the dollar, the lowest since 1985, and Cameron set in motion the process of electing a new leader of the ruling Conservative Party by October – most likely to be former London mayor Boris Johnson.
In India, shares fell more than 4% on the news but recovered by half after authorities moved to calm investor worries. The benchmark BSE ended 2.2% down, its biggest single-day percentage fall since February.
But the rupee was the worst hit, dropping to 68 to a dollar at one point, before statements from finance minister Arun Jaitley and RBI governor Raghuram Rajan steadied sentiments. Both said a solid economy and planned government reforms would allow the country to withstand any major impact from Britain’s vote to leave the EU.
Back in Britain, its borders faced being redrawn after Scotland voted to remain in the EU and First Minister Nicola Sturgeon said another referendum on its independence was now a distinct possibility. Scotland had voted in a 2014 referendum to remain in the UK.
The outcome also raised the prospect of a border coming up between the Republic of Ireland (an EU member) and Northern Ireland, as well as between Scotland and England eventually. The voting pattern revealed a “Leave” vote in England (which has the largest population) dragged the whole of the UK out of the EU.
As results trickled in on Friday morning, top political leaders, observers and journalists ran out of superlatives to describe the rapidly moving developments and struggled to make sense of the result that reversed the pro-EU decision of Britain’s 1975 referendum.
Johnson, one of the leading lights of the Vote Leave camp, was widely tipped to be the next Conservative leader and the next prime minister, after Cameron said he would stay on till October to ensure stability and enable the selection of the next party leader. The next prime minister will lead the two-year process under Article 50 of the Lisbon Treaty to exit the EU.
Crestfallen senior Labour and Remain leaders such as Keith Vaz and Chuka Umunna described the outcome as “seismic” and “a terrible day”, while an elated Nigel Farage of the UK Independence Party called June 23 Britain’s “independence day”.
Flanked by wife Samantha, Cameron announced his decision to step down during an address outside 10, Downing Street: “I will do everything I can as Prime Minister to steady the ship over the coming weeks and months, but I do not think it would be right for me to try to be the captain that steers our country to its next destination.
“This is not a decision I have taken lightly, but I do believe it is in the national interest to have a period of stability and then the new leadership required,” he said.
“There is no need for a precise timetable today, but in my view we should aim to have a new prime minister in place by the start of the Conservative Party conference in October.”
He said he had informed Queen Elizabeth of his decision. It will be for the new prime minister to carry out negotiations with the EU and invoke Article 50 of the Lisbon Treaty, which will give the UK two years to negotiate its withdrawal, he said.
“The British people have voted to leave the EU and their will must be respected. The will of the British people is an instruction that must be delivered.”