High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article, ft.com reports.

 

Britain’s future in the EU was on a knife edge on Friday morning after early referendum results favoured the Leave campaign, triggering a historic sell-off in sterling as markets confronted the possibility of a Brexit.

 

The pound set a record intra-day swing of 6.72% between its high and low points, while FTSE 100 futures slumped 6 per cent and US stock-index futures fell 2 %. Sterling touched a low of $1.4017, down as much as 5.8%.

 

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Just over a week ago, the pound approached $1.40 to the dollar and then surged, peaking at $1.5018 as polls were released soon after voting ended. During the post-Bretton Woods era of floating currencies, the pound has rarely spent time below $1.40 aside from the mid-1980’s era of extreme US dollar strength.

 

Opinion polls had earlier suggested Britain would vote to stay in the EU in its historic referendum and the pound recorded gains when Nigel Farage, the UK Independence party leader, conceded early in the evening: “It looks like Remain will edge it.”

 

But as the first results came in there was a dramatic shift in political and market opinion, with Leave outperforming expectations, as traditional Labour voters turned out in large numbers to reject the status quo.

 

Photo: Lenta.ru

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