video Business

Markets battered by Brexit aftershocks

Monday, June 27, 2016 - 01:52

Sterling falls more than 2 percent, the euro takes a hammering and stocks fall again as uncertainty after Britain's vote to leave the EU drove investors to seek safety in the yen, gold and low-risk government debt. As David Pollard reports, Britain's Finance Minister eased the falls slightly by saying the world's fifth-biggest economy will cope with the challenge ahead.

▲ Hide Transcript

▶ View Transcript

Stormy waters ahead for Britain - but at least its economy is watertight. Says the UK finance minister breaking his silence for the first time since the Brexit referendum result. (SOUNDBITE) (English) BRITISH FINANCE MINISTER GEORGE OSBORNE, SAYING: "It will not be plain sailing in the days ahead but let me be clear, you should not underestimate our resolve. We were prepared for the unexpected." Those words did appear to work - for a short while. After its double-digit percentage dive on Friday, sterling trimmed its losses - but then resumed a downward move. European share markets opening in the red - banking stocks heading for their worst ever two days. IHS GLOBAL INSIGHT, DIRECTOR OF SOVEREIGN RISK, JAN RANDOLPH, SAYING: "We've been plunged into which can only be described as an extraordinary period of uncertainty, the biggest since the Second World War. Politics, constitutions, the economy, all up in the air." Other investors were pinning their hopes on an ordered sell-off - and not the panic meltdown of Friday. (SOUNDBITE) (English) BGC PARTNERS MARKET STRATEGIST, MIKE INGRAM, SAYING: "As George Osborne only this morning pointed out, banks in the UK have something like ten times the capital that they had in 2007, 2008. So although the fallout for Brexit is absolutely not going to be painless, I don't think we are going to be sucked into a global financial abyss." But with the British government in something of a meltdown, a coherent response to the vote for Brexit appears some way off. IHS GLOBAL INSIGHT, DIRECTOR OF SOVEREIGN RISK, JAN RANDOLPH, SAYING: "We have chosen to leap into the dark without a plan. There is no leadership, no government, we have a political and constitutional vacuum." A week can be a long time in politics, as the saying goes - it may feel even longer for markets.