The UK has voted to leave the European Union – sparking an economic and political earthquake.

The result sent the pound into freefall and prompted a tearful David Cameron to announce his intention to resign – with a new Tory leader to be in place by October.

The Out campaign passed the winning post with a lead of more than one million votes – a margin of 51.9% to 48.1%.

The pound plummeted to a 31-year low as the results came in, while £122bn – or 8% – was wiped off the FTSE 100 in the minutes after it opened.

Bank of England governor Mark Carney said the UK was “well prepared” for the fallout of the Leave vote and that he would “not hesitate to take any additional measures required” to ensure financial stability.

Global markets are moving wildly, and currencies are making big moves, but the actually political process will be much, much slower.

First — technically speaking — the referendum is not legally binding. In theory, British Prime Minister David Cameron could ignore the will of a slight majority of voters, and not make any moves to exit the political and economic bloc.

But that is highly unlikely. Assuming Cameron respects the democratic process, he will likely invoke Article 50 of the Lisbon Treaty, which begins the formal, legal process for leaving the EU.

That would then begin a series of negotiations for how to disentangle the U.K. from the many EU structures to which it is a party, and could take up to 2 years (or more if both the U.K. and the European Council agree to extend the discussion period).

Britain's Prime Minister David Cameron arrives to pose for a family photo during a European Union leaders summit in Brussels April 23, 2015. European Union REUTERS/Francois Lenoir
Britain’s Prime Minister David Cameron arrives to pose for a family photo during a European Union leaders summit in Brussels April 23, 2015. European Union REUTERS/Francois Lenoir

Cameron has said this process would be irreversible.

“We should be clear that this process is not an invitation to rejoin, it is a process for leaving,” he said in February, according to reports.

Some have suggested that British leadership could avoid invoking Article 50 all together, and would instead attempt to negotiate a different — not entirely separate — relationship with the EU.

In the more immediate term, markets are going to react in a big way. The Brexit has no historic precedent. No precedent means volatility in markets, probably on a global scale.

If there’s one near-definite result that experts can safely predict around a Brexit, it’s that it increases the amount of uncertainty in markets. Market-watchers have predicted a global flight to safer assets — and indeed, that appears to have already begun: Gold futures, the classic safe-haven asset, rose more than 8 at one point, before paring some of those gains.

Asset prices told a story of a shocking turn of events that polls failed to predict and which markets failed to price in correctly:
Equities futures across the globe took a dive, with the Dow implied to open down more than 700 at one point. That loss was pared slightly, however, as investors digested the results.
Asia was also rocked by the referendum, with Japan’s Nikkei index down about 8 percent.

Perhaps the greatest effect from the leave victory, however, was felt in British pound sterling, which plummeted to a 1985 low against the dollar.

The dollar index, meanwhile, rose 3 percent at one point in the evening, setting it up for the biggest daily gain since 1978, according to Reuters.

Treasurys also felt the Brexit, with the U.S. 10-year hitting 1.507 percent — its lowest level since August 3, 2012 when the 10-year yielded as low as 1.471 percent.

Brexit

Results And Reaction As UK Votes Out

Mr Cameron tried to reassure the markets in a statement outside Number 10 – and said he would remain in place to “steady the ship” over the coming weeks and months.

The Prime Minister said he would leave it to his successor to invoke Article 50 of the Lisbon Treaty, which kicks off the two-year process of negotiating a new trade relationship with the UK’s former partners.

Leave campaign figurehead Boris Johnson – widely tipped to replace Mr Cameron – is expected to give a news conference at 11am.

Nigel Farage labelled 23 June “independence day” and demanded the creation of a “Brexit government”.

Labour leader Jeremy Corbyn rejected criticism of his attempts to persuade voters to choose Remain and told Sky News he would not resign.

“I have many criticisms of the EU,” he said. “We accept the result, we move on.”

The result could have huge implications for the UK, with Scotland’s First Minister Nicola Sturgeon already raising the prospect of a second independence referendum after all 32 local authorities north of the border voted for Remain.

Sinn Fein sources also said Brexit should lead to a poll on Irish unity, after Northern Ireland voted by 56% to 44% to Remain.

Reaction has started to emerge from the continent, with European Council President Donald Tusk admitting the EU would have to reflect on its own future.

He tweeted: “A serious even dramatic moment, especially for the UK.

“We are prepared for this negative scenario. There will be no legal vacuum.

“On behalf of all 27 leaders: we are determined to keep our unity as 27. I have offered an informal meeting of the 27 in the margins of the European Council summit next week.

“I will also propose to leaders that we start a wider reflection on the future of our Union.”

The result also expose divisions across the UK, with Leave performing strongly in the English shires, Wales and north eastern towns and cities like Sunderland, Middlesbrough and Hartlepool.

Remain secured decisive majorities in London, Scotland and Northern Ireland.

The turnout was 72.1% – the highest in a national poll since the 1992 general election.

A total of 33,577,342 voted – 17,410,742 for Leave and 16,141,241 for Remain.