An historic vote for Britain to exit the European Union caused the
tectonic plates of the European political and financial systems to
shift, setting off sharp tremors around the world’s financial markets,
including in India, on Friday June 24,2016
The ‘Brexit’ vote, which blind-sided most market analysts and pollsters,
sent stock markets from Tokyo all the way around the world to Wall
Street plunging; currency markets too were in turmoil, with the pound
sterling collapsing to a 30-year low against the US dollar.
India was not immune to the shock: the Sensex tanked by over 1,000
points in early trade and the rupee touched a low of 68.22 against the
dollar. They subsequently recovered, with the Sensex closing 604 points
down and the rupee closing at 67.96.
Britain's 2.2 million financial industry workers face years of
uncertainty and the risk of thousands of job cuts after the country
voted to quit the European Union, leaving question marks over London's
status as Europe's premier financial centre.
A leave vote means the future of Britain's financial services industry is now hanging in the balance.
Investment banks have already warned they could move thousands of jobs
if Britain opts out of the EU, while the European Central Bank has
signalled it could force euro trading out of London, the world's largest
foreign exchange market
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. The United Kingdom itself could break apart, with
leaders in Scotland -- where nearly two-thirds of voters wanted to stay
in the EU -- calling for a new vote on independence.
The EU for its part will be economically and politically damaged, 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.
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