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Billions wiped from British economy as pound takes a beating

Predictions in London suggest that today could be the fifth-biggest drop in UK stock market history.

Image: PA Wire/Press Association Images

THE POUND IS plunging as Britain heads out of the EU.

Markets have reacted overwhelmingly negatively to the uncertainty being faced as Britain heads out of the union.

The pound has dipped to its lowest point since 1985.

Predictions in London suggest that today could be the fifth-biggest drop in UK stock market history.

The currency has dropped to a 31-year low and currency, equity and oil markets have gone into freefall. In Tokyo, trading had been suspended.

Sterling was down as low as $1.33 on markets, having been $1.50 at 10pm last night.

The pound had earlier topped $1.50 following predictions the remain group would win but as the leave camp continued to post victories around the country, traders put in sell orders.

On equity markets Tokyo was down 6.7%, Hong Kong tumbled 3.6%, Sydney shed more than 3% and Seoul was 1.5% off. Shanghai and Singapore each sank 1.4%, while Taipei, Wellington, Manila and Jakarta all saw sharp losses.

The English, Swiss and Japanese central banks all pledged money to keep banks stable.

Markets

With the opening of the London Stock Exchange, the FTSE fell nearly 8%, wiping £160 billion off the value of businesses on the index.

However, the market clawed back some ground however after Prime Minister David Cameron – who had backed the failed campaign – said he would stand down. It is now down around 4.9%.

In Ireland, the ISEQ Index opened down by as much as 13%, but has bounced back slightly to now sit down around 9%.

PastedImage-78308 Source: Yahoo Finance

In opening London deals, share prices of banks and housebuilders had collapsed by about a third, but also won back some ground in later trade.

Housebuilder Taylor Wimpey was down 21%, and Barclays and Royal Bank of Scotland were each shedding roughly 20%.

“After a once-in-a-lifetime shock like this it will take markets time to find the right level,” said Lee Wild, head of equity strategy at stockbroker Interactive Investor.

The weakening pound led to some online British retailers experiencing problems. Asos, the fashion retailer, crashed following the news.

Read: BREXIT: The UK is leaving the European Union

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