€148bn has just been wiped off British stocks

Confused markets react to the UK's shock decision to leave the EU

€148bn has just been wiped off British stocks

London skyline | File photo

The FTSE 100 Index saw more than £120bn (€148bn) wiped off the value of its constituent companies in the first few minutes of trading after the UK voted to quit the EU.

It was one of the biggest falls in the index's 32-year history, as it dropped by around 500 points, or more than 7%.

Meanwhile, the Bank of England said it was on standby to take action after the UK's decision to quit the EU sent the pound plunging to a 31-year low amid market turmoil.

It said it was "monitoring developments closely" and pledged to "take all necessary steps to meet its responsibilities for monetary and financial stability".

Some experts predicted that the Brexit vote would send the UK back into recession and there was speculation that the Bank could cut interest rates from 0.5% to zero in coming months to cushion the economy from the expected blow.

The central bank said it had undertaken "extensive contingency planning" and was working closely with the Treasury and other central banks after the poll which has rocked markets across the globe.

Sterling fell to its lowest level since 1985 - marking a sharper dive even than on Black Wednesday in 1992.

CBI director-general Carolyn Fairbairn said it was now an "urgent priority" to reassure the markets.

"We need strong and calm leadership from the Government, working with the Bank of England, to shore up confidence and stability in the economy," she said.

Ratings agency Standard & Poor reaffirmed its previous warning that the UK stood to lose its AAA credit rating following a Leave vote.

The pound saw wild swings after the polls closed - research showed the Remain side marginally ahead at 11pm and the pound headed sharply up to a six-month high against the dollar at $1.50.

But after regional results began to paint a clearer picture, the pound nosedived by more than 10% to $1.33.
It was the lowest level for sterling against the US currency since 1985. Sterling also saw a sharp fall against the euro, down 8%