Franc strengthens as Britain votes to leave the EU

Britain has entered uncharted waters after voting to leave the European Union, according to a projection by all main British broadcasters. The pound suffered one of its biggest one-day falls in history.

The decision raises the likelihood of years of negotiations over trade, business and political links with what will become a 27-nation bloc. In essence, the vote marks the start – rather than the end – of a process that could take decades to unwind.

The “leave” side was ahead by 51.7% to 48.3% with more than three-quarters of votes tallied, making a “remain” win a statistical near-impossibility.

The pound plummeted more than 10% in six hours, from about $1.50 to below $1.35, on concern that severing ties with the single market will hurt the British economy and undermine London’s position as a global financial centre.

The result has also driven investors to the safe-haven Swiss franc, which firmed against the pound. The franc also gained against the euro, which fell to CHF1.0685, its lowest since August. The Swiss currency had already strengthened in the weeks running up to the vote.

The Swiss National Bank wants to prevent a flight to the franc, with bank president Thomas Jordan announcing an intervention – if necessary lowering interest rates – should Brexit trigger turbulence on the currency markets.

An SNB spokesman said on Friday morning the bank would not comment until a final result was declared.

Divided nation

As results poured in, a picture emerged of a sharply divided nation. Strong pro-EU votes in the economic and cultural powerhouse of London and semi-autonomous Scotland were countered by sweeping anti-Establishment sentiment for an exit across the rest of England, from southern seaside towns to rust-belt former industrial powerhouses in the north.

Scottish leader Nicola Sturgeon said her country had cast an “unequivocal” vote to remain in the European Union – all 32 voting areas in Scotland voted to remain – a result that raises the spectre of a new referendum on Scottish independence.

“The vote here makes clear that the people of Scotland see their future as part of the European Union,” she said.

Years of negotiations

With the result in favour of an EU exit, Britain becomes the first major country to decide to leave the bloc, which evolved in the ashes of the Second World War as European leaders sought to build links and avert future hostility. Authorities ranging from the International Monetary Fund to the US Federal Reserve and Bank of England warned a British exit would reverberate through a world economy that is only slowly recovering from the global economic crisis.

The result triggers a new series of negotiations that is expected to last at least two years as Britain and the EU search for a way to separate economies that have become intertwined since Britain joined the bloc on January 1, 1973. Until those talks are completed, Britain will remain a member of the EU.

Viviane Reding, the former European Commissioner for Justice and Consumers, tweeted:

The European Union is the world’s biggest economy and Britain’s most important trading partner, accounting for 45% of exports and 53% of imports.

Stay with swissinfo.ch for more reaction from Switzerland.

What is your reaction to the news that Britain has voted to leave the EU?