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Britain Leaves EU, Global Economic Crisis Follows

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Britain has decided to push forward with “Brexit,” leaving the European Union in a historic vote on Thursday’s referendum while unleashing an economic crisis and, dealing the most massive blow to Europe’s unity since World War II.

A report from Reuters states that world financial markets sank as a near-half 52-48 vote for leaving resulted. The consequences included the biggest economic shock since the 2008 global financial black hole, this time with interest rates at or near zero around the world, tying lawmakers’ hands in fighting it.

The British pound saw its most significant one-day plunge in history, going down over 10% against the dollar to hit lows not seen since 1985. The chief ratings officer for Standard & Poor’s informed the Financial Times that Britain’s AAA credit rating was not tenable anymore.

Huge opening losses are predicted in futures trading across share markets in Europe. Britain’s FTSE futures and Germany’s Dax futures both fell around 9%. The euro zone’s Euro Stoxx 50 futures dropped more than 11%.

The vote will begin an exit process with the EU that will last at least two years, casting doubt on London maintaining its status as a global financial capital. Prime Minister David Cameron will be stepping down in October, saying that the leadership needs a “fresh face.”

The euro fell more than 3% against the dollar due to concerns Britain’s leaving will have on a wider economic and political level to the world’s biggest trade bloc, now that it doesn’t have its second-largest economy. Investors turned to safe-haven assets like gold, and Japan’s yen surged.

The Bank of England has said it would take all action necessary to secure financial stability. Policymakers worldwide are also ready to take steps to stabilize markets. Japanese Finance Minister Taro Aso promised to “respond as needed.”

Despite all this, Britain’s eurosceptic forces have been ecstatic, celebrating the victory they claim is a protest against the political establishment, foreign leaders and big conglomerates, including President Barack Obama who had encouraged Britain to stay in the EU.

Nigel Farage, leader of the eurosceptic UK Independence Party, called Brexit a “victory for real people, a victory for ordinary people, a victory for decent people,” and that the decision is the beginning of an independent United Kingdom.

The UK now faces its own internal struggles, as Scotland voted 62% in favor of staying. It is now likely to push for a new referendum on whether or not it becomes independent, after its 2014 vote to stay in the UK. First Minister Nicola Sturgeon of Scotland said that it has been made “clear that the people of Scotland see their future as part of the European Union.”

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