Market turmoil as Britain chooses Brexit

ETX trading floor Image copyright ETX Capital

Those who support Brexit say that it is now time for a calm and considered approach.

It is not clear the markets will allow for that.

As Bill O'Neill, the head of the UK investment office at UBS Wealth Management, said: "The markets will not wait, they are a discounting machine and they will over-react first, think later."

We have already seen a taster of that reaction to the referendum decision.

FTSE Futures, the index traded ahead of the opening of the London markets, is down nearly 9%.

And market watchers say they haven't seen that sort of fall since the financial crisis.

The Nikkei in Tokyo is down more than 7%.

British bank stocks traded in Asia are also down - HSBC and Standard Chartered fell by over 7%.

Banks are believed by many to be most exposed to the Brexit decision, as they trade across Europe via the European Union's single market, often in euros.

It is now not clear how that relationship will change.

Sterling, which started the evening at record highs for the year after positive polls suggested Remain had won, has fallen to levels not seen since 1985.

In dramatic overnight markets, the currency swung wildly - with levels of volatility greater than during the financial crisis of 2008 and Black Wednesday in 1992 when the pound fell out of the Exchange Rate Mechanism.

The governor of the Bank of England is expected to try to offer reassurance in a public statement.

The Bank has set up liquidity partnerships with other central banks around the world to offer financial support to banks.

In extremis, and at this stage it is still in extremis, the Bank's Monetary Policy Committee, which sets UK interest rates, could be called for an emergency meeting.

But, my sources say that the Bank will not want to act precipitately and will want to see how the economy reacts before making any decisions on whether to increase - or reduce - interest rates.