David Cameron will resign as Prime Minister by October Britons voted against his advice to remain in European Union. Cameron announced his resignation, saying that the country needed "fresh leadership.”
With the Leave campaign securing 52 per cent of the vote, Mr Cameron addressed the nation in an emotional speech outside 10 Downing Street to announce that he would be stepping down.
While England voted overwhelmingly for Brexit, Scotland and Northern Ireland backed Remain. London backed Remain but the turnout was lower than expected because of bad weather.
Brexit: Britain votes to leave EU in historic divorce
Voters have voted in favor of Brexit: British exit from the European Union. That means that in the coming months, British and European leaders will begin negotiating the terms of Britain's departure.
Britain's exit will affect the British economy, immigration policy, and lots more. It will take years for the full consequences to become clear. But here are some of the most important changes we can expect in the coming months.
The process of leaving the EU will take years
A Brexit vote is not legally binding, and there are a few ways it could theoretically be blocked or overturned. However, as the BBC notes, "it would be seen as political suicide to go against the will of the people as expressed in a referendum."
Article 50 of the Treaty on European Union establishes the procedures for a member state to withdraw from the EU. It requires the member state to notify the EU of its withdrawal and obliges the EU to then try to negotiate a withdrawal agreement with that state.
A Brexit vote, however, does not represent that formal notification. That notification could take place within days — for example, when EU member countries meet for a summit that is scheduled for June 28 to 29. Or British officials might wait a few months to pull the trigger.
Once Britain invokes Article 50, it will have a two-year window in which to negotiate a new treaty to replace the terms of EU membership. Britain and EU leaders would have to hash out issues like trade tariffs, migration, and the regulation of everything from cars to agriculture.
In the best-case scenario, Britain may be able to negotiate access to the European market that isn’t that different from what it has now. Norway is not a member of the EU, but it has agreed to abide by a number of EU rules in exchange for favorable access to the European Common Market.
Brexit will cause problems for Britain's economy
In the short run, uncertainty about Britain’s future relationship with the EU, its largest trading partner, could push the UK into a recession. Market watchers predict an "explosion of volatility" on Friday morning as the markets process the implications of Britain’s exit. Many economists expect both the British stock market and the pound to open lower on Friday morning. Britain’s Chancellor of the Exchequer, George Osborne, even hinted that he could suspend stock market trading if Britons voted to exit the EU.
Brexit means significant uncertainty for migrants
One of the most important and controversial achievements of the EU was the establishment of the principle of free movement among EU countries. A citizen of one EU country has an unfettered right to live and work anywhere in the EU. Both Britons and foreigners have taken advantage of this opportunity.
There currently are about 1.2 million Brits living in other EU countries, while about 3 million non-British EU nationals live in Britain. Thanks to EU rules, they were able to move across the English Channel with a minimum of paperwork. Britain’s exit from the EU could change that profoundly.
It’s possible, of course, that Britain could negotiate a new treaty with the EU that continues to allow free movement between the UK and the EU. But resentment of EU immigrants — especially from poorer, economically struggling countries like Poland and Lithuania — was a key force driving support for Brexit. So the British government will be under immense pressure to refuse to continue the current arrangement.
At a minimum, that would mean that people moving to or from Britain would need to worry about passports and residency rules. And it could mean that some British immigrants may lose their right to continue living and working in the UK and be deported.
"The withdrawal process is unprecedented," a British government spokesperson said a few weeks ago. "There is a great deal of uncertainty about how it would work."
‘Brexit’ Expected to Rattle U.S. Economy
Britain’s exit is expected to jolt the U.S. economy, likely rattling restive equity markets and driving up the value of the dollar. It could also weaken U.S. diplomatic leverage in Europe and upend the corporate strategies of U.S. companies based in London.
Brexit has happened, and India’s equity investors are in shock
Even before the final numbers were out, India’s benchmark Sensex index opened over 700 points or 2.85% lower at 9:20 AM local time. Voters in the UK have decided to leave the European Union by a margin of 52% to 45% ("Leave” versus "Remain” votes.)
By 1:05 PM, the Sensex fell almost 835 points, a drop of 3%.
As Quartz wrote yesterday, the Sensex fall might be a knee-jerk reaction to global markets. Nevertheless, foreign investors could sell off in emerging markets, including India, to hedge global losses. The Indian currency was under pressure after the British pound fell more than 10% against the US dollar—lowest since the 1980s. In morning trade, the rupee fell to 68.22 a dollar, the lowest level since March 1. The Reserve Bank of India (RBI) is monitoring the currency movement to keep volatility in check.
India’s central bank governor Raghuram Rajan said that the RBI is "prepared for any eventuality” after Britain voted for Brexit.
Speaking to ET Now, a television channel, Rajan added: "There are concerns from Brexit referendum, see no immediate dire impact on Britain..Have been in touch with central banks across the world on Brexit…We are watching all markets both internationally and domestically, where necessary will provide liquidity.”
Rajan also said that Indian companies that are invested in the UK will have to "figure out what its’ market is and how best to access it.” "Immediately, the attractiveness to invest in the UK will be a little more limited,” Rajan said.
Finance minister Arun Jaitley said that India is prepared to deal with the Brexit volatility. "Our immediate and medium-term firewalls are solid too in the form of a healthy reserve position,” Jaitley said in a statement.