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Referendum: UK votes leave, Cameron to resign

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24th Jun 2016
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The establishment has woken up this morning to find that their worst nightmare has come true, as the UK voted to leave the EU.

Late polls, including AccountingWEB’s very own Brexit barometer, indicated a late swing towards remain, but in the end the result defied experts, pollsters and the bookies and the 52%-48% outcome has given the government the bloodiest of noses.

A seismic night in politics ended with Prime Minister David Cameron announcing his resignation, stating that he was "not the right captain to steer the country to its destination". Speaking outside 10 Downing Street the PM announced that the country needed "fresh leadership", stating that he remain in office for the next three months to 'steady the ship', then trigger a leadership contest to choose the Prime Minister who will lead the UK out of Europe.

Provincial gains

One of the most striking developments was the visible split between those who claim to feel the benefit of EU membership and those who don’t. A pattern emerged throughout the evening of small but frequent gains for leave in provincial areas being pegged back by big wins in metropolitan regions for remain. In the end these large gains were not enough to maintain the status quo, and those in power must now come to terms with the monumental task of extracting the UK from the European Union.

Scotland voted comprehensively for remain (62%), with SNP leader Nicola Sturgeon repeating her assertion that the country was being “dragged out of the EU against its will” and raising the prospect of a second independence referendum north of the border.

So at this early stage what does the leave victory mean?

The people’s verdict now requires the government to untangle a huge swathe of trading agreements, national legislation, tax treaties, accounting rules and other protocols that have been thrown into disarray by the exit vote. Some commentators estimate that this could take up to 10 years of parliamentary time to untangle.

Experts also predict that the result is more than likely to kick the government’s making tax digital plans into the long grass for the foreseeable future as legislators battle to get to grips with the UK’s European extraction.

From an economic standpoint George Osborne, whose position is also under threat, promised an ‘emergency budget’ if the UK voted out, and many observers will be keen to find out if the Chancellor will now follow through on his threat to implement £15bn of tax rises, £15bn of spending cuts, a 2p rise in the basic rate of income tax, a 3p rise in the higher rate, and a 5% inheritance tax rate to 45p.

After riding high on the back of positive news for the remain camp prior to the polls closing, the pound plunged throughout the night, at one stage suffering its biggest ever one-day fall of 10% (it swung by 7% during 2008’s financial crash).

While many businesses put their investment plans on hold pending the outcome, opinions differ on how the vote will impact on business both big and small.

Economist Richard Murphy argued that a recession is now unavoidable, stating that investment in the UK will be paused during renegotiation. “No big business is going to sink millions or even billions into our economy without knowing what the future terms of UK trade might be”, he said.

However, AccountingWEB regular Norman Younger stated that he was confident that the UK could prosper with an economy driven by high technology exports.

TaxTV’s Giles Mooney was optimistic for accountants, stating that businesses will now need advice “more than ever” to deal with markets, staffing and employment laws.

As we move into a new era of British politics what is clear is that this result will have an impact on everything – the economy, politics, health, education and immigration, to name but a few.

During the campaign we heard a lot about what is wrong with the current system, but little detail on the mechanics of what will happen in the event of an exit. The negotiations are likely to be long and painful, and AccountingWEB will be on hand to report on the issues that matter to our readers.

*8:36am: This article was amended to include news of the Prime Minister's resignation*

Replies (190)

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By thegreatgrumbleduke
24th Jun 2016 06:52

Britain, what have you done...

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Replying to thegreatgrumbleduke:
rebecca cave
By Rebecca Cave
24th Jun 2016 07:55

Cameron ...what have you done. There was no legal need to call the referendum. Now we have a fine mess which may well lead to the break-up of the UK, and possibly of EU as well.

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Replying to Rebecca Cave:
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By petestar1969
24th Jun 2016 11:18

taxwriter wrote:

Cameron ...what have you done. There was no legal need to call the referendum. Now we have a fine mess which may well lead to the break-up of the UK, and possibly of EU as well.

Why is the EU breaking up a bad thing?

We beat up the Germans in a war to stop them taking over Europe and they are still trying to take over, albeit economically. If the EU breaks up, I will have a party.

As for the Scots wanting to leave the UK as far as I am concerned they voted to leave when they voted Alex Salmond into power in the Scottish parliament. They didn't need an independence referendum they needed kicking out.

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Replying to petestar1969:
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By mabzden
24th Jun 2016 13:02

At the time of the first Scotish Referendum (it's becoming like describing old wars....) EU membership was a big weakness for the SNP. The EU said, to paraphrase Obama, you'll need to go to the back of the queue, and Spain (and maybe other countries) will say no.

I can't see anything being different now. So good luck selling that to the Scottish people.

Speaking personally I'm tired of being blackmailed by the ScotNats and no longer listen to them.

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Replying to mabzden:
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By Isla
24th Jun 2016 22:12

The SNP are not blackmailing anyone and in fact if you are in England nobody is asking you to listen to them. The people of Scotland are very unhappy being governed from London. I can completely understand that.

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Replying to Isla:
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By mabzden
25th Jun 2016 12:09

The way democracy works is everyone gets a vote and we all accept the decision. We don't have Surrey threatening to break away from the UK every time Labour wins an election. People may moan if they lose but they keep their toys in the pram.

Anyway, what happened to the last referendum being a once-in-a-generation event? Was that only if the SNP won?

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Replying to petestar1969:
By coops456
24th Jun 2016 15:55

"Why is the EU breaking up a bad thing?" 3 things off the top of my head:
1. contribution to maintaining 70 years of peace in W Europe
2. assisting development of democracies in former Eastern Bloc
3. tackling pan-national challenges like climate change

Germany can't be faulted for having a strong economy surely? I would like to see your evidence for the assertion that the Germans are trying to take over Europe, economically or otherwise.

As for Scotland - they are not alone in viewing the Westminster parliament as being entirely unrepresentative. If you live in a safe seat for any party, your vote is all but worthless. Only a relative handful of voters - in marginal constituencies - control the make-up of our government.

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Replying to petestar1969:
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By Isla
24th Jun 2016 22:08

I can assure you they would be delighted to leave. You have a short memory, the better together campaign telling their usual lies stopped them from doing so. Do you not understand why the Scottish people don't want to be governed from London?

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Replying to petestar1969:
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By Isla
24th Jun 2016 22:16

I can assure you the people of Scotland would be delighted to leave. You seem to forget that the lies of the better together campaign are what stopped that happening. They simply don't want to be governed from London and have never wanted that in over 300 years.

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Replying to Isla:
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By mabzden
25th Jun 2016 12:37

If that's true Scotland should go. But in Referendum Part I (in fact part II, as there was one in the 1970s) the majority of Scottish voters said the opposite - and that was when oil was at around $100 per barrel compared to $50 now.

I think what you're saying in the pro-independence Scottish voters would be delighted to leave, and it seems to be this minority that makes all the noise.

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Replying to Isla:
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By Vaughan Blake1
27th Jun 2016 10:52

Yet they seem to want to be governed by Brussels?

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Replying to petestar1969:
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By Isla
25th Jun 2016 01:55

There speaks the voice of someone who does not understand very much about Scotland or it's people.

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Replying to Isla:
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By Captain Kirk
27th Jun 2016 20:34

Well, do they want to ruled by unelected people in Brussels, rather than a government that they share and are arguably over-represented in? You need to answer this Isla.

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Replying to Isla:
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By Vaughan Blake1
28th Jun 2016 10:06

Absolutely right!

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Replying to Rebecca Cave:
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By AnnAccountant
24th Jun 2016 11:29

What are you saying, Taxwriter? That the nation should only call a vote if the result will be what YOU want it to be?

The breathtaking arrogance of that view is outstanding

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By mabzden
24th Jun 2016 08:07

It will be interesting to see what happens to the tax and accounting profession. I imagine the FRC will be keen to dump - or at least amend - the new accounting standards.

And will it really stop the Making Tax Digital moves? That's very much a domestic initiative.

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Replying to mabzden:
By Tom Herbert
24th Jun 2016 08:38

Thanks mabzden. Yes, fascinating times for the tax and accounting profession. VAT in particular...

I didn't mean to imply that it will stop making tax digital. It's an inevitability. However, unless it's all prepped and ready to be rolled out it is more than likely to be bogged down in all the renegotiation palava. Gove himself is predicting a five-year round of talks, and he was trying to talk things up!

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John Stokdyk, AccountingWEB head of insight
By John Stokdyk
24th Jun 2016 09:26

Already the repercussions are unwinding. The BBC is reporting that David Cameron will step down in October. Comments have already been posted about the implications for accounting standards and tax initiatives like MTD.

Aside from all the political fallout, we're going to be busy bees on the AccountingWEB team trying to round up informed views on how those kinds of issues will play out.

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Replying to John Stokdyk:
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By Sheepy306
24th Jun 2016 10:04

John Stokdyk wrote:

Aside from all the political fallout, we're going to be busy bees on the AccountingWEB team trying to round up informed views on how those kinds of issues will play out.

Don't forget to find a couple of minutes too for that complete website overhaul too !

Interesting that Awebbers voted remain in the big Aweb vote, is that a reflection of accountants views in general or is it that the typical Aweb user lives in London, Scotland or Ireland.

Off to France next month, really should have bought some Euro's yesterday!

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Replying to Sheepy306:
By Tom Herbert
24th Jun 2016 10:13

In a completely unscientific observation there was a big queue at the M&S bureau de change yesterday - maybe they knew something I didn't!

The AWeb vote was interesting. It was significantly pro Leave for almost the entire campaign, then suddenly swung back in the last three days.

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Replying to TomHerbert:
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By mabzden
24th Jun 2016 10:23

I received a warning from my bank on Wednesday saying they may not be able to complete forex transactions today. That may explain the queues at m and s.

The world still seems to be turning from where I'm standing. Stocks are down a bit but not all that far.

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Replying to TomHerbert:
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By Captain Kirk
27th Jun 2016 20:36

In a completely unscientific observation, I saw people going about their normal business today; what's going on? We should be told!

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By Paul D Utherone
24th Jun 2016 10:08

The country says leave

Dave says "here you go Boris you sort it out"

Nige receives P45 but is over the moon to have at last won something.

My retirement date stretches further into the future as my pension tanks :(

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Replying to Paul D Utherone:
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By AnnAccountant
24th Jun 2016 11:31

Paul D Utherone wrote:

The country says leave

Dave says "here you go Boris you sort it out"

Nige receives P45 but is over the moon to have at last won something.

My retirement date stretches further into the future as my pension tanks :(

Well, right now, you can sell the FTSE for about the same price it's been for months - around 6050

If you think this is that bad for the UK, why don't you put your money where your mouth is and sell out (at no loss) and invest in shares on the EU or other markets?

But you won't though will you?

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By Captain Kirk
24th Jun 2016 10:18

We have restored our democracy; what on earth did you think it was about?

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Replying to Captain Kirk:
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By KH
24th Jun 2016 11:04

That is the problem with democracy, it is really the rule of the least-well informed, and in the case of the UK our democracy was, until today, almost totally a wadocracy ... I once heard an Indian sage say that the only good government was an enlightened autocracy ... i.e. one led by a leader who is well above politics and takes into account the state of the individual's health and wellbeing ... but unfortunately such a scenario seems well off the board for the foreseeable, as well as the not-so foreseeable, future. Ah well, time to buckle down to a new regime, harder work, less money, dearer goods, and rampant racism. HELP!

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Replying to KH:
By Tim Vane
24th Jun 2016 11:17

KH wrote:

I once heard an Indian sage say


I never believe anything that Sage say. All hype.

KH wrote:

Ah well, time to buckle down to a new regime, harder work, less money, dearer goods, and rampant racism. HELP!

No thanks, you can keep that scenario. I'll be looking forward to less red-tape,more money, better choice and rampant common sense without a federal agenda.

And it's dumb accusations about racism that helped lose the vote for the remain camp - labelling everybody who disagrees with you a racist is moronic.

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Replying to Tim Vane:
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By chatman
24th Jun 2016 11:32

Tim Vane wrote:
it's dumb accusations about racism that helped lose the vote for the remain camp

Do you think that people voted Leave because they felt aggrieved at being called racist? Seems a very emotional response to such an important matter.

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Replying to chatman:
By Tim Vane
24th Jun 2016 12:04

chatman wrote:
Do you think that people voted Leave because they felt aggrieved at being called racist?

No, I think they stopped listening to the argument whenever the racist rhetoric started.
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Replying to KH:
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By AnnAccountant
24th Jun 2016 11:35

KH wrote:

That is the problem with democracy, it is really the rule of the least-well informed, and in the case of the UK our democracy was, until today, almost totally a wadocracy ... I once heard an Indian sage say that the only good government was an enlightened autocracy ... i.e. one led by a leader who is well above politics and takes into account the state of the individual's health and wellbeing ... but unfortunately such a scenario seems well off the board for the foreseeable, as well as the not-so foreseeable, future. Ah well, time to buckle down to a new regime, harder work, less money, dearer goods, and rampant racism. HELP!

The breathtaking arrogance of the Remainers continues.

They really do believe their opinions are the same as facts.

Well, like it or not, the "least-well informed people" (as you arrogantly and demeaningly call Leave voters) have spoken. If you love the EU so much go and live in its mainland paradise.

I hear the summer riots in Paris will be particularly delightful this year

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Replying to KH:
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By Captain Kirk
24th Jun 2016 11:38

How arrogant; so you know better than me and should rule the world. Which Indian sage did you meet? Someone wise once said words to the effect that democracy may not be perfect but it's better than any alternative. Your answer clearly shows the complete lack of understanding by Remain that we don't want to be told what to do by an unelected politburo. Be thankful that you can now remove any politician you don't like - try getting rid of Jean-Claude!

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Replying to Captain Kirk:
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By njpandya
25th Jun 2016 19:42

try getting rid of Jean-Claude! - Very true, our departing PM tried and successfully failed...he he he...Freedom comes first...

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By Evans Dekyi
24th Jun 2016 10:39

Does the Leave campaign really understand the implications of winning which we must all accept: The people has spoken. My question is, are we going to apply for visa to visit any Eu country?

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Replying to Evans Dekyi:
By Tim Vane
24th Jun 2016 11:19

Evans Dekyi wrote:

My question is, are we going to apply for visa to visit any Eu country?

That's your question? Blimey, you lead an uncomplicated life. The answer is: nobody knows yet.

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Replying to Tim Vane:
joe
By Smokoe Joe
26th Jun 2016 16:59

... but probably not!

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Replying to Evans Dekyi:
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By AnnAccountant
24th Jun 2016 11:39

Evans Dekyi wrote:

Does the Leave campaign really understand the implications of winning which we must all accept: The people has spoken. My question is, are we going to apply for visa to visit any Eu country?

Have you got a criminal record?
If not, you probably don't need to worry.
If you have, maybe it is ok for a country to protect itself by denying criminals entry.

Maybe if we leave, we can set some standards for people who want to come here too. They have been notably lacking lately - as mandated by EU laws that I didn't vote for.

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Replying to Evans Dekyi:
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By Captain Kirk
24th Jun 2016 11:53

Yes, you must all accept the democratic result - that's why it's called democracy. Why would we have to apply for visas, or why shouldn't we have to come to that. I travel a lot and these days and visa applications aren't difficult.

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Replying to Evans Dekyi:
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By Michael C Feltham
24th Jun 2016 12:23

Evans Dekyi wrote:

Does the Leave campaign really understand the implications of winning which we must all accept: The people has spoken. My question is, are we going to apply for visa to visit any Eu country?

Since we haven't needed a visa to visit most European nation states since circa 1946, why would we need one now?

"The British visitor's passport
Cardboard identity card issued under arrangements regarding collective passports by the UK Passport Agency (2001)

A new simplified type, the British Visitor's Passport, was introduced in 1961. It was a single-page cardboard document valid for one year obtainable for many years from Employment Exchanges, as agents of the Passport Office, and then from a Post Office. It was accepted for travel by most West European countries (excluding surface travel to West Berlin), but was dropped in 1995 since it did not identify the holder's nationality or meet new security standards."

I have been toddling off to Europe since well before Britain even started its accession process to the original E.E.C.

If any EU state tried to impose new travel restrictions and demands (such as visas) then this would immediately provoke a [***]-for-tat reciprocal act by the UK government.

What everyone (including our mainly idiot political class!) suffer from is total lack of knowledge about history; economic, political and diplomacy.

The UK were members of the EEA (European Economic Area) well before this was subsumed into the EU: however, the reciprocal agreements on health and pensions could be defined as under the previous EEA treaty.

Etc.

To me, it is all rather the same as a company acquiring another company, yet the new company is still bound by the contractual and thus legal obligations and liabilities of the acquired company; particularly employment. Which is what TUPE is all about. (TUPE is an acronym for the Transfer of Undertakings (Protection of Employment) Regulations.)

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Replying to Evans Dekyi:
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By njpandya
25th Jun 2016 19:43

Answer is NO..

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Replying to Evans Dekyi:
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By Vaughan Blake1
28th Jun 2016 10:11

Given the Schengen agreement at least you would only need one!

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By seitler
24th Jun 2016 10:40

I hope Tom is right about MTD being put on the back burner. It will be one good thing to come out of this shock result

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By Ian McTernan CTA
24th Jun 2016 10:50

I didn't vote in the Aweb poll, but I did vote Leave.
Boris for PM and make Cameron in charge of the negotiation team for the EU exit- that will teach him to quit as soon as the going gets tough:-)
There will be turmoil for a while as things settle down but after a while most will realise it's not an overnight thing and Europe is unlikely to cut off it's nose to spite it's face so expect a lot of rhetoric over the next few weeks followed by some calmer negotiations.

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Replying to Ian McTernan CTA:
Should Be Working ... not playing with the car
By should_be_working
24th Jun 2016 14:31

I'm with you on most of that, except with Cameron's evident lacking in the skill of negotiation I'd leave him on the backbenches.

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By MI3raser
27th Jun 2016 16:09

The FTSE 100 Index saw more than £120bn wiped off the value of its constituent companies in the first few minutes of trading after the UK voted to quit the EU.
It (Other OTC: ITGL - news) was one of the biggest falls in the index's 32-year history, as it dropped by around 500 points, or more than 7%.
Meanwhile, the Bank of England said it was on standby to take action after the UK's decision to quit the EU sent the pound plunging to a 31-year low amid market turmoil.
It said it was "monitoring developments closely" and pledged to "take all necessary steps to meet its responsibilities for monetary and financial stability".
Some experts predicted that the Brexit vote would send the UK back into recession and there was speculation that the Bank could cut interest rates from 0.5% to zero in coming months to cushion the economy from the expected blow.
The Bank said it had undertaken "extensive contingency planning" and was working closely with the Treasury and other central banks after the poll which has rocked markets across the globe.

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Replying to MI3raser:
By jonsa
24th Jun 2016 17:19

Thought I better look at my SIPP value, which is invested in equities, especially if today ended down 10%. Have not checked, but now I wonder. Yes, my SIPP went down - by 0.3%. No panic then.

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Replying to jonsa:
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By Captain Kirk
26th Jun 2016 12:58

Mine went up - it's all about assett allocation I think. On June 16th the ftse was 5900 ish, today it's 6100 ish.

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By Younis
24th Jun 2016 11:00

Since 9am I'm being phoned by my EU clients who have invested their money and established their businesses here in the UK. All of them with almost the same questions: what will happen for their investments, businesses and NI contributions if they are asked to leave the UK??? And do they have to stop investing???
I had no single answer for their queries!!!

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Replying to Younis:
Tornado
By Tornado
26th Jun 2016 13:12

Why would they be asked to leave?

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Replying to Younis:
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By Vaughan Blake1
28th Jun 2016 10:18

I have a single reply for them - dunno!

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By edhy
24th Jun 2016 11:11

This is bad day for UK, EU and even for world. EU should be moving towards USE (United States of Europe), instead it is back to fragmentation. This is from the part of world where weak states and intense rivalry among neighboring states is keeping countries underdeveloped. Brexit is myopic, bad for economy bad for political system. Though Accountants may have more work but is better to do improvement work “fixing” work.

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