Britain votes to leave EU; Markets dive; Prime Minister Cameron to resign

Posted at 4:50 AM, Jun 24, 2016
and last updated 2016-06-24 04:50:41-04

(CNNMoney) — Britain has voted to leave the European Union, a shock development with profound implications for markets and economies around the world.

Here’s what you need to know:

1) The results are in: After a long night of vote counting, the final results have been issued: 51.9% of voters chose to leave the EU, while 48.1% wanted to remain.

2) Markets are an absolute bloodbath: A massive decline in bank shares helped push London stocks down by 8% at the open. The FTSE 100 has since clawed back some ground to trade around 4% lower.

The pound plunged close to $1.33, its lowest level in more than 30 years, as the results of the referendum became clear. It’s now trading down 9% at below $1.38.

Dow futures are down 450 points. In Asia, Japan’s Nikkei tanked 7.9%, and Hong Kong’s main index dropped 2.9%.

3) A frantic search for safety: The price of gold has spiked as investors pour money into perceived safe havens. Others to watch include U.S. Treasuries, the Japanese yen and Swiss franc.

4) Cameron out: Prime Minister David Cameron, who campaigned against an exit, has announced that he will resign. Without offering a detailed timetable, Cameron said a new leader would be installed by October.

5) Appeals for calm: The Bank of England is under immense pressure to keep markets and banks operating in an orderly manner. In a statement, the central bank said it would “take all necessary steps to meet its responsibilities for monetary and financial stability.”

Officials and regulators in other countries around the world are also preparing for fallout. South Korea’s government has called an emergency meeting, while others have called press conferences or issued statements.

6) How did this happen? Cameron promised voters in 2013 that he would allow a referendum on whether Britain should remain in the European Union. At the time, the chance of exit appeared to be low. But the campaign — which focused heavily on immigration and the economy — revealed deep fissures in Britain along both political and geographic lines.

7) The big questions: Britain’s decision to exit the EU has injected huge amounts of uncertainty into markets. At this point, investors have more questions than answers — will the U.K. be able to negotiate new trade deals? How long will that take? Will global banks seek to move their operations out of London?

8) The big takeaway? This isn’t a one-day event. The repercussions of the vote to leave are only just beginning, and it has the potential to upend Europe’s established political order.