The United Kingdom opted to leave the European Union in a closely-fought referendum. The ‘Leave’ side won decisively with 52 per cent of the vote in the high-turnout vote.
This is the second referendum on Britain’s relationship with the European project. In 1975, in a referendum on whether the U.K. should stay or leave the European Community (Common Market) Area, the country voted for staying in with a resounding 67.2 per cent vote.
Implications of Leave vote on UK
1. Prime Minister David Cameron, the architect of the referendum and a passionate supporter of Britain within the European Union, that as a measure of respect for the “will of the people” he would be stepping down as Prime Minister in October.
2. Regions of London, Scotland and Northern Ireland voted to remain. Specially, Scotland voted by a margin of 62% to 38% to remain in EU. Scotland believes that it has to exit from EU against its will. Thus, Scotland may seek independence of UK.(Presently, UK consists of Northern Ireland, Scotland, England and Wales.)
3. The markets have predictably reacted sharply to the referendum result with the pound falling to its lowest since 1985. Other major currencies have also shown volatility especially the Euro that has seen its worst fall against the dollar.
4. A leading investment analyst told that in the short term there would be considerable caution and lower confidence on spending and investment. “British Airways has just put out an announcement saying they expect lower profits this year because of Brexit-related slowdown in traffic.