Britain battled to stop worldwide Brexit alarm today as sterling crumbled to a three-decade low against the dollar, while bank, airline and property shares plummeted.
Other world markets steadied a little after Britain’s June 23 vote to abandon the European Union wiped $2.1 trillion off international equity values Friday. Analysts warned of a volatile period ahead as global investors grappled with the financial consequences of the Brexit referendum.
“Today I want to reassure the British people, and the global community, that Britain is ready to confront what the future holds for us from a position of strength,” Britain’s finance minister, George Osborne, declared before European financial markets opened.
Britain’s economy is “as strong as could be”, the minister said.
The pound skidded to $1.3222 in morning London trade, its lowest level against the dollar since September 1985.
London’s FTSE 100 index, which boasts many international companies, fell 1.5 percent in morning trade, masking steeper falls in key sectors likely to be affected by Brexit.
“George Osborne’s comments have clearly prevented a much more dramatic decline this morning, but markets will remain incredibly volatile throughout the long-winded process of exiting the EU,” said Interactive Investor equity strategist Lee Wild in London.
British budget airline EasyJet, which warned of a Brexit hit to sales, fell 16.0 per cent. International Airlines Group, parent of British Airways and Iberia, dropped 9.4 per cent.
Royal Bank of Scotland shares plunged 15 per cent. Lloyds Banking Group fell 8.9 per cent.
British construction group Taylor Wimpey tumbled 12.4 per cent.
One fifth of British business leaders are considering moving operations abroad after the referendum, according to a survey from leading business lobby group, the Institute of Directors.
In eurozone equity trading, Frankfurt’s DAX 30 index dipped 0.9 per cent to 9,472.49 points and the CAC 40 in Paris shed 1.0 per cent to 4,067.02. In Madrid, shares eased, frittering away early gains after the ruling conservative Popular Party emerged on top in elections Sunday and vowed to try to form a government.