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British pound dives as nation votes to leave EU

Leader of the United Kingdom Independence Party Nigel Farage celebrates as the 'leave" vote appears to be winning.|AFP/Getty Images

LONDON — Britain entered uncharted waters Friday after the country voted to leave the European Union, according to a projection by all main U.K. broadcasters. The decision shatters the stability of the project in continental unity forged after World War II in hopes of making future conflicts impossible.

The decision raises the likelihood of years of negotiations over trade, business and political links with what will become a 27-nation bloc. In essence the vote marks the start — rather than the end — of a process that could take decades to unwind.

The “leave” side was ahead by 51.7 percent to 48.3 percent with more than three-quarters of vote tally, making a “remain” win a statistical near-impossibility.

The pound suffered one of its biggest one-day falls in history, plummeting more than 10 percent in six hours, from about $1.50 to below $1.35, on concern that severing ties with the single market will hurt the U.K. economy and undermine London’s position as a global financial center.

But if it shocked the markets, the result delighted “leave” campaigners.

“The dawn is breaking on an independent United Kingdom,” U.K. Independence Party leader Nigel Farage said to loud cheers at a “leave” campaign party.

“Let June 23 go down in our history as our independence day!”

As results poured in, a picture emerged of a sharply divided nation: Strong pro-EU votes in the economic and cultural powerhouse of London and semi-autonomous Scotland were countered by sweeping anti-Establishment sentiment for an exit across the rest of England, from southern seaside towns to rust-belt former industrial powerhouses in the north.

“A lot of people’s grievances are coming out and we have got to start listening to them,” said deputy Labour Party leader John McDonnell.

With the result in favor of an EU exit, or Brexit, the U.K. becomes the first major country to decide to leave the bloc, which evolved in the ashes of the war as European leaders sought to build links and avert future hostility. Authorities ranging from the International Monetary Fund to the U.S. Federal Reserve and Bank of England warned a British exit will reverberate through a world economy that is only slowly recovering from the global economic crisis.

“The appeal of the anti-Establishment populist argument that we need to take back control of our borders and immigration … proved stronger than the economic risks that Brexit would entail,” said Tim Bale, a professor of politics at Queen Mary University of London. “I think people are soon going to find out that the promise of the ‘leave’ campaign cannot possibly be realized.”

The vote is likely to cost Prime Minister David Cameron his job after the leader of the ruling Conservative Party staked his reputation on keeping Britain in the EU. Former London Mayor Boris Johnson was the most prominent supporter of the “leave” campaign and is now seen as a leading contender to replace Cameron.

Cameron promised the referendum to appease the right wing of his own party and blunt a challenge from the U.K. Independence Party, which pledged to leave the EU. After winning a majority in Parliament in the last election, Cameron negotiated a package of reforms that he said would protect Britain’s sovereignty and prevent EU migrants from moving to the U.K. to claim generous public benefits.

Critics charged that the reforms were hollow, leaving Britain at the mercy of bureaucrats in Brussels and doing nothing to stem the tide of European immigrants who have come to the U.K. since the EU expanded eastward in 2004. The “leave” campaign accuses the immigrants of taxing Britain’s housing market, public services and employment.

Those concerns were magnified by the refugee crisis of the past year that saw more than 1 million people from the Middle East and Africa flood into the EU as the continent’s leaders struggled to come up with a unified response.