Britain has voted to leave the European Union, results from Thursday’s referendum showed, a stunning repudiation of the nation’s elites that deals the biggest blow to the European project of greater unity since its formation after World War II.
Global financial markets plunged as complete results showed a near 52-48 percent split favoring leaving. Fears that the decision will hit investment in the world’s 5th largest economy, threaten London’s role as a global financial capital and foment uncertainty in the world’s biggest trading bloc.
The pound suffered its biggest one-day fall in history, falling more than 10 percent against the dollar to hit levels last seen in 1985, while the euro slumped more than 3 percent.
“It’s a momentous day. It’s an extraordinary event and the it will change the course of British history,” said British Foreign Secretary Philip Hammond who had campaigned for a “Remain” vote.
The leader of the anti-EU U.K. Independence Party, Nigel Farage, hailed it as “independence day.”
Quitting the EU could cost Britain access to the EU’s trade barrier-free single market and mean it must seek new trade accords with countries around the world. President Barack Obama says it would be at the “back of a queue” for a U.S. pact.
The EU for its part will be economically and politically weakened, facing the departure not only of its most free-market proponent but also a member with a U.N. Security Council veto and powerful army. In one go, the bloc will lose around a sixth of its economic output.
The vote will initiate at least two years of divorce proceedings with the EU, the first exit by any member state. Prime Minister David Cameron is expected to notify his European counterparts of the decision within days.
Cameron had called the referendum in 2013 in a bid to head off pressure from local eurosceptics, including within his own party, and had led the campaign for a “Remain” vote.
“We’re in uncharted territory,” an aide working in Cameron’s office told reporters.
Yet there was euphoria among Britain’s eurosceptic forces, claiming a victory over the political establishment, big business and foreign leaders, including President Barack Obama who had urged Britain to stay in.
“Dare to dream that the dawn is breaking on an independent United Kingdom,” said Nigel Farage, leader of the eurosceptic U.K. Independence Party. “This will be a victory for real people, a victory for ordinary people, a victory for decent people. … Let June 23 go down in our history as our independence day.”
Asked if Cameron should resign, Farage said: “Immediately.”
The United Kingdom itself now faces a threat to its survival, as Scotland voted 62 percent in favor of staying in the EU and is likely to press for a new referendum on whether to become independent after its 2014 vote to stay in the U.K.
Scottish First Minister Nicola Sturgeon said Thursday’s vote “makes clear that the people of Scotland see their future as part of the European Union.” Northern Ireland’s largest Irish nationalist party, Sinn Fein, said the result intensified the case for a vote on whether to quit the United Kingdom.
European politicians reacted with shock. “Please tell me I’m still sleeping and this is all just a bad nightmare!” former Finnish Prime Minister Alexander Stubb posted.
The world’s biggest trading bloc could even face an existential crisis as surging populist and anti-immigrant movements across the continent issue their own calls to quit. Far-right leaders in France and the Netherlands immediately demanded referendums of their own.
French National Front leader Marine Le Pen declared “Victory for freedom!” Dutch far-right leader Geert Wilders said: “We want to be in charge of our own country, our own money, our own borders, and our own immigration policy.”
Britain, which joined the then-European Economic Community (EEC) in 1973, has always been an ambivalent member. A firm supporter of free trade, tearing down internal economic barriers and expanding the EU to take in ex-communist Eastern European states, it opted out of joining the euro single currency or the Schengen border-free zone.
Cameron’s ruling Conservatives in particular have risked being torn apart by euroscepticism for generations.
World leaders including Obama, Chinese President Xi Jinping, German Chancellor Angela Merkel, NATO and Commonwealth governments had all urged a “Remain” vote, saying Britain would be stronger and more influential in the EU than outside.
The four-month campaign was among the most divisive ever waged in Britain, with accusations of lying and scare-mongering on both sides and rows on immigration, which critics said at times unleashed overt racism.
It also revealed deeper splits in British society, with the pro-Brexit side drawing support from millions of voters who felt left behind by globalization and believed they saw no benefits from Britain’s ethnic diversity and free-market economy.
A pro-EU member of parliament was stabbed and shot to death in the street a week ago by an attacker who later told a court his name was “Death to traitors, freedom for Britain.”
But in the end, concerns over uncontrolled immigration, loss of sovereignty and remote rule from Brussels appear to have trumped almost unanimous warnings of the economic perils of going it alone.
“People are concerned about how they have been treated with austerity and how their wages have been frozen for about seven years,” said John McDonnell, finance spokesman for the opposition Labour Party, which had favored a Remain vote.
“A lot of people’s grievances have come out and we have got to start listening to them.”
The Bank of England said it would take all necessary steps to secure monetary and financial stability. Global policymakers also prepared for action to stabilize markets, with Japanese Finance Minister Taro Aso promising to “respond as needed” in the currency market.
EU affairs ministers and ambassadors from member states gathered in Luxembourg Friday morning for previously scheduled talks that will provide the first chance for many to react. A regular EU summit has been pushed back to next Tuesday and Wednesday, when Cameron may trigger Article 50 of the EU’s treaty, the legal basis for a country to leave, setting in motion two years of divorce negotiations.
Even less clear at this stage is what sort of relationship Britain will seek to negotiate with the EU once it has left.
To retain access to the single market, vital for its giant financial services sector, London would have to adopt all EU regulation without having a say in its shaping, and pay a substantial contribution to Brussels coffers for market access, as Norway and Switzerland do.
EU officials have said U.K.-based banks and financial firms would lose automatic “passport” access to sell services across Europe if Britain ceased to apply the EU principles of free movement of goods, capital, services and people.
Aside from trade, huge questions now face the millions of British expatriates who live freely elsewhere in the bloc and enjoy equal access to health and other benefits, as well as millions of EU citizens who live and work in Britain.