Following the “Brexit, “this week has perhaps been one of the most dramatic weeks, both in terms of politics and the financial markets, for a long time.

After months of hard-fought campaigning from both sides of the campaign, the Leave side became victorious in the early hours of Friday morning in a shocking turn of events. Prior to the results being announced, it was almost 90% assumed that the Remain side would emerge the winner.

So, how did the events unfold?

  • – As the polls closed on Thursday night, there was a general feeling that it would be very close, but that the Remain side had the edge. Ladbrokes were offering 4-1 on an out vote, and it was assumed that a Remain verdict was a 90% certainty. UKIP leader Nigel Farage himself commented, “It looks like Remain will edge it.”
  • – Encouraged by polls favouring the Remain side, the pound finished the night at $1.50, while the FTSE 100 was up 1.2%.
  • – Gibraltar was the first to declare their results, and unsurprisingly, they voted overwhelmingly to remain. The first shock of the night came immediately afterwards, when Newcastle voted to remain – but only by a small margin.
  • – It gradually became apparent that the Leave campaign was doing much better than expected, and by 3:00am the Leave campaign starting drawing ahead very clearly. The result was then confirmed at around 6am – that the UK had voted by 52% to 48% to leave the EU.
  • – The FTSE 100 fell 7% in early trading to just over 5,800 points, ending the day 3.15% lower at 6,138. Sterling plunged dramatically, falling more than 8% against the dollar and 6% against the euro. The tremors were also felt in the US, as the Dow Jones posted its biggest one-day slide in almost 5 years.
  • – On Monday, it emerged that the pound had plunged to a 31-year low against the dollar. Yields on 10-year government bonds also slid below 1% for the first time.
  • – Banking and financial stocks, housebuilders and travel firms were the worst-off as the news of the Brexit sunk in. Shares in EasyJet were down 22% after the firm said that it would take a £28 million hit following two months of turbulence, and warned that a Brexit would have a negative impact upon the airline.
  • – RBS briefly plunged to its lowest level since 2009, and shares in Foxtons crashed 22% after the estate agent issued a Brexit profit warning.
  • – The continued market turmoil on Monday was not helped by the UK’s current shaky political position. Prime Minister David Cameron, a strong proponent of the Remain campaign, resigned after he delivered his reaction to the “Leave” victory. Although a new Conservative Prime Minister is expected to be in Downing Street by September, this shock resignation has definitely added to the general feeling of uncertainty.
  • – Meanwhile, the Labour Party is undergoing divisions of its own, as various shadow cabinet members and Labour frontbenchers are resigning and signalling that they would like to implement a vote of no confidence against Labour leader, Jeremy Corbyn.

Tuesday saw a slightly more relaxed atmosphere in the markets. Pressure has eased, and the FTSE 100 opened higher. By mid-afternoon trading, the index was up 2.75% and the FTSE 250 was up 3.3%.

Investors around the world will no doubt be still keeping an eye on the both the financial markets and the UK political and economic scene, as the country tries to find a way to leave the European Union with the minimum possible damage.



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