august 2014. i won't put the biggest most since 19 73. what does this mean for the eurozone? germany and french equities hit. is slumping three percentage points for the this is the biggest risk now, the domino effect of the eurozone. right-wing parties in french and spain both want referendums. of course, and the debt market as well. guy: let's talk about what is happening this morning for the no surprise to the markets really seeking some safety. you are seeing it across the picture this morning. the storyere we think looks for the these major assets absolutely massive that this morning. germany moving into negative territory. are being sold.

the u.s. 10 year is certainly very much -- the front end of the european really crossed and getting -- finland, germany, france, netherlands, belgium, some of the biggest moves you can see. remember, these are standard deviations. you really don't ever see these kinds of colors. it is a huge move. the market is looking for safety. platforms are being left to one side. so many big assets including sterling. we will talk to a lot of guests this morning. we try to get you an idea of what is going on. how did the smart money get it so wrong? kramer from s&p will

join us later on. he told us that it was an automatic reaction of the smb would downgrade the u.k.. we get his thoughts this morning. an ardent campaign to leave the eu will also join us. we will count you down to see where the market is going to open in 29 minutes time. we will be fascinated to see this move on the pound will take other asset class movements. trying to get reaction from you as we have seen this leave the vote come through. a trading floor in london. ryan chilcote joining us out of brussels. first, people awaiting the sierra david cameron reacts. emma: absolutely right. that is the question whether stay on ason will

prime minister. it is officially confirmed britain will lead the eu after 43 years. the prime minister will speak later this morning. that could be as early as 8:00 a.m.. david cameron was the person who granted this referendum making good on the general election promise to hold the vote. vigorouslyaigned to stay in the european union. this result is very damaging for him. his main opponents were members of his own party. the former mayor of london and others. they signed a letter saying david cameron has a mandate to continue as prime minister. the letter was signed before the result was known. whether they will stick by their call, we just have to wait and see. of the u.k. independence party has called on david cameron took it immediately.- quit

some members of the labour party also said david cameron should resign. give fromnow until we david cameron itself. it could be at 8:00 a.m. when the u.k. stock market opens. guy: emma, thank you very much. saying that his bank will work with relative -- relevant authorities. how is the city of london reacting this morning? tradingler is on the floor in london. walk us through, what kind of business is being done? what is happening with margin calls in terms of the bid offer? these guys have been beenng me they have closing people out all might. they have been trading since last night. call started coming in. marginf people are using

calls as stops. that is the way they trade. tradis happening now, the ers tell me the investors get right back in after they are close down. today, they have not been doing that. we're seeing limit down across a whole lot of assets. the pound is dropping to 1.33, i see it trading now. it is coming back up a little bit. are still expecting it to fall further. the big hedge funds that they deal with, the big money is out for now doesn't plan on getting back into it for little while. not coming back today, or monday. one trader told me this is the worst night of his career. he called the price action here "vile." i was also told this is worse and lehman brothers in terms of

price action. these guys have been working constantly. you can hear the numbers and -- bells and air raid sirens behind me. they're going off constantly. energy and of action. there is a lot of dismay. many wondering how did this happen. as you said, the smart money was on remain. they got it completely wrong. the question was, how did they get it so wrong? guy? guy: matt, thank you very much. sorry, i have some breaking news now coming out of germany. we have been hearing for many banks this morning. executivealy chief the strategy was not conditional on remaining in the eu. we have heard from the chief executive of deutsche bank who is talking that this is not a good day for europe. they cannot foresee the

consequences. mitigateis prepared to the impact. deutsche bank speaking. let's get reaction from brussels for step many politicians have been speaking. the finance minister of germany has also been discussing how the andsion is spelled out could be applied. ryan chilcote has the latest from brussels. what are you hearing at the moment, ryan? think germany's vice chancellor send -- summed it up last. the european establishments view of the referendum and brexit for he said it is a bad day europe. there's real concern not just about the uk's relationship with the european union, where that it goes over the renegotiation over the exit. also, there is an essential question within the european union itself. how does it stay together? we heard starting in the netherlands, a party on the right saying they now want to

have their own referendum. we have heard from the right in france that they would like to have a referendum. we heard from parties on the right in italy saying they would as well. the are concerned about disintegration of the european union itself here in brussels. to that end we heard from the president of the european parliament speaking an hour ago. he said he will be on the phone with angela merkel because he is concerned about how to stop a chain reaction. going to be a heads of state meeting on tuesday and wednesday. that may now not to click enough for european leaders. i'm hearing we could have a heads of state meeting as early as this weekend. a meeting as early as tonight. they warn really prepared for this. there was no master plan of what to do in the event of a brexit. we will leave it there, thank you very much. ryan joining us out of brussels.

we will be back to all of our teams throughout the morning. this is where we sit right now. signs of stabilization in the cable rate. a colossal loss this morning. business being executed on the phone just to make absolutely clear that everyone knows what is going on. , the bid israding on for the bond market. they seeing big moves there. it is unsurprising to see we are seeing a bid on that. we will get the right price on gold. gold is very strong this morning. has considerable experience in the u.k. banking sector and the financial sector. your reaction? >> clearly, it is a surprise. it is a disappointing result for

many people and for the economy. we ought to work with the democratic decision. i'm sure we all will. guy: how does it affect your business? what do you now execute? phen: in the short-term there will be some market disruption. we are in good shape. our balance sheet is strong and well matched. i think we will weather that market disruption. nonetheless, there is uncertainty. guy: how did the smart money get it so wrong? they were anticipated mr. be a fairly easy story to work their way around. over thewhat was said last few days. how did london read the rest of the country so badly? en: what we are seeing around the world to some level of disconnect parlay because of globalization and economic

disappointment since the financial crisis. that means -- leaves a lot of people feeling left behind for the we've seen that in trump's success and america. we've seen that in the left-wing votes across europe. is partlyat this about the specifics of brexit. it is partly, if you want a global phenomenon, which politics has to focus on quite carefully i think. by: the market was caught surprise, maybe not read in the story and reevaluating some of the stories quite carefully. it institutions have gone through some preparation in terms of understanding the mechanics of all of this. when you look at the landscape in front of you, how does the next few days work? how does the market function in this kind of environment? bephen: there will uncertainty. you're seeing that this morning. don't believe this will end up being a long-term drama. i do think that all of the

market disciplines will be able to cope with the short-term volatility. or considerhim reaction after a number of days. it doesn't mean it will be a great outcome. it will be some medium-term uncertainty. i have no fears in terms of institutions able to cope, or markets able to adjust. in germany,sat here german politician sat in disbelief. give us a sense of your concern about the domino effects. could the eu see a followthrough? there are already too right-wing parties wanting referendums. stephen: clearly there is going markethort-term disruptions and the medium-term uncertainty. that would be mainly politically driven. market will be reacting to political events. everyone has a common interest in minimizing the economic

fallout not just in terms of the u.k. but across the world. i think in the end, if you like, calmer heads will prevail. not that we have a good situation. it is less good. caroline: how many look at moving to frankfurt. you think that london could take a hit. i think the u.k. will be economically weaker as a result of this vote. i don't believe that it will dramatically change the picture. will continue to be a leading financial center. we will work with the result. guy: how does this change the you position your business? we have seen a slowdown of flow the the u.k. into the way

infrastructure is used. when you look at that story, does it carry on? doesn't become more aggressive? how do people view this? phen: every business is in its own position. yet the take out insurance every year whether the exchange rate is up or down. 80% of our earnings come from outside the u.k.. will changek it at all. it helping our balance sheet will change. we will continue to execute exactly as we have been doing. they will be some adverse trains in terms of economic growth. those impact the insurance sector. guy: it is literally -- we heard from barclays carrying on. that is exactly how your your business? stephen: that is what we have to do. in the case of rsa, we will

carry on doing exactly what we have been doing. al-shater g is good for both outcomes. our foreign earnings will protect us considerably to the exchange rate fall. ofwill weather aperiod market volatility. i have no fears for rsa even though i think the result is one that will have some medium-term uncertainty. it is not the result that we wanted. caroline: what about, in terms of the nature of the insurance. it is difficult to protect yourself against fiscal instability. that something you're seeing a demand for at the moment? a we seeing a turn towards how companies present themselves? this is a seismic shift in the events. you are preparing to weather the storm right now. stephen: each business is different. nore is, if you like, immediate impact.

the general insurance market will continue to serve the economy tomorrow as it did yesterday. we have at economic ups and downs. we have had political ups and downs. for more than 350 years, we have weathered those. we will continue to do that. guy: what policy action do you want to see? those with the levers of economic growth, which ones need pulling? you run rsa, you know the plumbing. what needs to happen to make sure that it functions? it will i think function just fine. what we find is that the markets and the media will react to the drama. will prevailheads in the world will go on. politicians need to come together to make sure that in the short run there are no

knee-jerk reactions. the best of the bad decisions is taken in terms of how the country makes its arrangement with europe and the rest of the world going forward. it will take quite a while for the implications to be worked through. international implications. but we will work through, we always do. guy: stephen will not stay with us, i tell the complete line. i'm sure he has a lot of other things that he has to do. this is what the market is doing right now. features.the ftse we expect a negative of the bulk of his earnings are going to be affected by the drop. it will be interesting to see how the ftse 100 ultimately goes through. from some very

senior european politicians over the next few hours. the president of the european council of represents the sovereign governments around the eu is making a statement. let's listen in. >> it is a historic moment. a moment for reaction. i want to reassure everyone that thise prepared for negative scenario. a fairis not only weather project. leaders.oken to the eu i mean prime minister's and president as well as heads of the eu institution. about theoken possibility of a brexit. on behalf of the 27 liters i can say that we are determined to keep our unity. theall of us, the union is

framework for our common future. i would also like to reassure you that there will be no legal vacuum. until the dow to kingdom formally leaves the european union it will continue to apply -- until the united kingdom formally leaves the european union the rules will continue to apply. procedures for the withdrawal of the u.k. from the eu are clear and set out in the treaties. in order to discuss the details of the proceedings i have offered the leaders and informal meeting of the 27. we have wider reflection on the future of our union. finally, it is true that the past years have been the most

in the history of our union. i always remember what my father used to tell me -- what doesn't kill you makes you stronger. thank you. what doesn't kill you makes you stronger. mr. tusk wrapping up his commentary this morning. we are joined now on the phone. good morning. >> good morning, guy. guy: is this going to kill the eu? >> we didn't manage to dodge this bullet. is putting his hat on. what doesn't kill you makes you stronger. saying it is time to

deploy that with the british upper lip was to what it means is a lot of uncertainty. just listening for a few minutes there's a certain amount of chaos to put it mildly. we are seeing market reactions which outweigh the market reactions we saw in the lehman crisis. it is obviously a very significant event. it will leverage emetic impact in the short-term on corporate thinking. if people were concerned about uncertainty before, they will be concerned about it even more so. we have an unwinding process ahead of us with the eu which will take considerably -- it is postust the two yearws the triggering of article 50. it is the renegotiation of all of these trade treaties. resourcesvery limited

we have to negotiate. some people talk about it taking up to 10 years to renegotiate these. the answer to created is to say the least really troubling. having said all that, we have to make the best of it. the electorate is spoken and we have to get on with it. we have a clear strategy. 90% of our revenues come from outside the u.k. we are insulated rather like stephen was saying. we have no currency exposure across borders. we match on revenue cross basis. the financial implications are not serious. having said that, for of our top 10 markets are in germany, france, italy and spain along with the u.k.. we focus on trying to increase our presence in those markets to make a stronger. , our western

competition will have an advantage if there is a break between the eu and ourselves. if that is retribution as has been supposed. also, which of the trade blocs will they have to be building. last but not least will this even more on digital and data. thatrony about this is this is what we call a harrah's on the penalty -- horizontal penalty. we maybe increasingly isolated. guy: what the the unintended consequences of this are. n: the unintended consequences are the effect on the union. there have already been calls for scottish referendum and the northern ireland. i'm sure we'll have welsh referendums as well. we already heard calls for the

nexit, netherlands and denmark and scandinavia. fairly serious implication. we have this populist surge across the world. we look at spain and what is happening there and america on both sides of the political spectrum post of is not just trump but bernie sanders as well. -- we talkedlmost to one another in a bubble. it is not even a southeast bubble if you look at the voting on the referendum in the u.k.. was very solidly to leave. clearly, the u.k. is divided.

it has serious political implications. it will make companies pod's attic -- pause yet again. it will make companies even more cautious than they were before. that the signal up attorney. -- signal volatility. there also come significant opportunities. what i think is puzzling is what the market cut it so wrong yesterday. with a private polls by hedge funds were the result of such being spread around. it might've of made them feel much more confident. it is puzzling that sterling hit highs in the indices hit yesterday. guy: martin? martin: yeah? guy: we have to wrap it up, thank you for taking time to

join us on the phone. about the smart money. what i think is interesting i just talked to two ceo's, both of them making it very clear earnings're external will insulate them plus of the ftse is down by eight percent this morning. where will it finish the session? caroline: let's get over to the leave campaign. the chief executive joining us now live from westminster. you look at the ramifications of the market, the pound having a record slump. we should be ftse 100 down significantly. are you concerned about the hampering of the u.k. economy in what you pushed for? is aow, what we're seeing short-term turmoil in the market. that is the scaremongering that went on from number 10 and

number 11 and their complicit international institutions. markets often overreact. you just heard martin sorrell go from talking what uncertainties to how his business would deal with it. then at the end he is talking what opportunities. this is a huge upper 30 for the -- opportunity for the u.k. to strip away burdens. you're seeing sterling strengthened against the dollar and the euro. markets often overreact. it was completely wrong yesterday. has risen. people will work hard and play hard and support england. the world carries on. this is an opportunity for the u.k.. also it is an opportunity for the european union to record needs to evolve from a bureaucratic political union into being a trading union sot actually helps foster that the millions of young

people across the eu who are currently unemployed we can get them back into work. this is an opportunity. people need to call down -- calm down and treat it as such. caroline: must david cameron go? partyd: the conservative will work all of that out. my expectation is that david cameron will stay for a while. that is for the conservative party. the much more important thing is the process of the negotiations. we need to ensure there is some senior business people involved in that. not just politicians. what is absolutely clear in the last people who should be anywhere near the negotiating team is the prime minister, the chancellor, and civil servants from the treasury. it needs to be a pro brexit business led team. hello? yes? it has been wonderful

speaking to you, thank you very much indeed. we will keep that going. remember, we have been speaking to s&p they were talking but the potential cuts to the aaa rating. he will also speak to others. ♪ caroline: good morning, and welcome to "on the move." we are just moments away from

the start of european trading. goodbye europe. united kingdom posts with european union. the pound hit a 1985 low. the breakthrough 100, gold falls and banks can uttered. can they stay that way. guy: let's show you exactly what is happening. we are to get an idea of how this equity markets will be performing. i wonder if we will be actually seeing any kind of market open. will it fit the normal pattern of things? you want to see how long it will take the market makers. you saw the rally yesterday. this was european equities into the close yesterday. they were on the front to, they were rallying. it was starting to get a little bit of a bid. not much market pricing at the moment. we will have to wait and see. function, that

is probably part of my problem at the moment. a little issue with delayed pricing. let's go to matt miller who is standing by on the trading floor. actioneah, a lot of here. the dax down 977 points. the dow both down about 500 or 600 points as far as futures are concerned. a lot of big drops here. we saw these moves telegraph. they have been here since it :00 p.m. last night. they started to see ticks down ftse futures at midnight. that accelerated at 2:00 a.m. when it came out that the leave camp was getting more votes than the remain camp.

at has been downhill ever cents. a little bit of a bounce in after thein futures bank of england came out and said they would do whatever it takes. beders don't think it will possible to cut rates. they have to raise interest rates if inflation comes through. that will be tough if gdp starts to collapse, if we see a contraction and a recession. the bank of england saying a lot. probably has its hands tied according to traders here. it is fairly hectic. they think it will be a hectic hour or first two hours of trading then as soon as people and accounts are close down and margin calls are done and positions are off the table traders here telling me they think the rest of the day will be calm. what can you do after you have liquidated and gotten the board cleared off? you want to stay put at least in the big funds until he figure

out what is going on. guy: great stuff, thank you. let's get what is happening in the bond market. we have some spectacular action taking place. center is where we see the action at the moment. austria, finland, germany, fascinating to see that we may be about to hear from mark carney. just watch the bank of england is going to say. we may be getting a statement from the banks. two-year we see bigger moves elsewhere. that is beginning to move up. let's talk a little bit about the where the 10 years are right now. the periphery is being sold. you are seeing the bid. look at germany.

these are the 10 year stories as well. move it waste free interesting talking to italian bankers. his of the biggest hit in the credit fall, and bank and equity. now from frankfurt. we spoke a couple of days ago. we talked about the binary story that surrounded what is happening with this brexit. au told me there would be downgrade for the u.k. do we get a downgrade for the u.k.? >> good morning. we had the results. the british people voted for brexit. we were saying at least a year that a brexit vote with the toy downgrade in the u.k..

that is what we said. that is what i will tell you today. guy: what happens? walk me to the mechanic to go through. -- mechanics you will go through. it has to be decided by a ratings committee. committee will go through the evidence. in accordance the regulatory at thements we will look decision of the committee as soon as we are allowed. guy: is there a notification period that you have to give the u.k. government? might we get it over the next few days? eu regulation is clear. before you release a rating action you have to give the affected issuer a 24 hour one full working day. that is a prepublication notice.

this is to allow the affected issuer to point out irregularities -- or i should say in accuracies -- that might lead to the reopening of the committee. an inferred lay, the agency leaves the confidential information given to us on a confidential basis. there are certain safeguards. these are basically the laws. that is really the constraining factor. caroline: how many cuts to the rating to think there will be? will go after aa plosser could there be multiple. : i think you'll understand i cannot speculate live on the program what future rating actions might be. we did say that a brexit vote lead to a downgrade of at least

one notch. if it were more than one it would depend on the circumstances. and the turmoil that might be ensuing. we need to assess the situation. the initial market reactions, but we need to see what happens when the dust settles not only in the financial side of things many? marks aboutuestion that. the super the strongest governance standards in the world. the verdict ability of policymaking was among the strongest to globally. that is something that in the coming days and weeks and maybe months we have to reassess. some of the splits in the electorate have already been pointed out. especially regional splits. it is somewhat unfortunate that

scotland and northern ireland voted the other way. all of these raises many questions which were well beyond the question that is now hotly debated this morning about the state of prime minister david cameron. guy: what do you think of the financial sector and how it will weather this storm? we have some numbers, barclays is down by 30%. 34%hsbc only down by 5% focusing on its global outreach. pmp, no price on in the of those institutions at this point. the market can't price them post-up give us your sense of what this means for the european financial sector? moritz: what we said is the key the uncertainty. not only now but probably on during an lasting uncertainty

for years. until there is more clarity about the future rules of engagement with the u.k. with the rest of the european union will be this will be a long and difficult negotiations which need to be approved in all parliaments. when you have this level of under uncertainty the sector that is most dependent on trust is probably the financial sector. it is no surprise the financial sector is particularly hard hit. again, we have other indicators and we will have to see what the new prices settle. thisnk everyone, for most was a surprise coming off of the referendum. it may take some time until traders and analysts figure out what the right price level is. from a rating perspective you are looking at the data they share prices or the high-frequency indicators you look at the longer term trends

in economic development and policymaking. ramer?ne: mr. k the short-term turmoil being identified beautifully on the bloomberg at the moment. 58% plummet, the housebuilder builders really being hurt at the moment. hit.are among the worst this is ferocious. i want to talk about the ramifications for the rest of the eu. we had: the being talked about by many banks today. it could be hit in tents of the. infrastructure spent going to u.k.. also the ramifications on france, spain, right-wing parties calling for their own referendums. will there be other sovereign ratings at risk? is one of the key problems on the negotiations that many of the european partners are currently facing a eurosceptic populist whatever

you want to call it surge themselves. they will be very careful in giving the u.k. too much credence if you like. that would just embolden their own nonestablishment positions. i think this will be a key determinant of the negotiations going forward. it is not good news for swiss and conversations happening in brussels and elsewhere. right now we are not seeing a direct a knock on the fx. it will be on a mac into sovereign ratings would be impact. we are not for seeing that this is the first omen of to fall. we could have other referendum and an unraveling of the eu. would underestimate the strong commitment to what is essentially a political project of the european union. it is not equally strong everywhere, clearly weaker in poland. for poland, first of all the current eu budget is still

operating for couple of years. this is a seven-year budget. once the new budget has been negotiated, the u.k. might fall out as a contributor to the budget. this will hurt the net recipients like poland or hungary. there are bigger issues also, that is the growing divide germany, andest -- others, and the east meaning poland and others. that arose in the context of the refugee crisis. there were contributors like germany and sweden and others were asking for solidarity from those countries that have been receiving large financial transfers. they didn't get any. this would probably be much bigger issue than the budget negotiations in the next few years rather than brexit in itself. spreadsare seeing widening in the periphery today. the market is selling the

periphery. what action do you think -- do you think that will be contained? do you worry that the ecb may have to do more to make sure the spreads don't blowout any further? tz: i think we are not in blowout territory at all. we've seen on the screen the italian 10 year bond which is still yielding well below the inflation target of the ecb. it would be rather odd for the ecb to activate omt, if there were to be in of the program country -- in other program country. surprised if the ecb were going down that route. it would require that these countries would goad into a formal program with the esm. they would become a program country. we are still very far away from these type of emergency yields.

the spread widened by 14 basis points today. you see how much they converged over the last year or two, this is not very massive. kramer, joining us live from frankfurt, thank you very much for joining us and giving her perspective on the sovereign ratings. indeed the moves we are seeing the stock market. the stoxx 600 slumping after the vote to leave by the united kingdom. what does this mean for the periphery of europe? france's national front is now theed for a referendum on eu membership itself. is this likely to happen at the moment? >> definitely, a brexit vote the farve a boost to right wing of france.

they said this is a victory for freedom. what seemed impossible yesterday has become possible. you have been calling for referendums for someone leaving the eu and the euro currency. last year, when i was talking to her, she said to call me madam frexit. the referendum in france could happen next. of course, she has high lows in the opinion polls at the moment. 27% in the first round of the next presidential election. next year she would pass the first round and be present in the second round. for the french president, the

crisis situation. as we speak, he is having an emergency cabinet meeting. not very far from here, the meeting of the commissioner for economic affairs will be attending. out in paris, thank you very much indeed. i will get my producer to put you up a euro chart. we are getting information from the from the boss snb. it has confirmed it has been into the market and intervene into the market to stabilize the situation. this was well flagged by those as they look forward -- or didn't look over and to the european union. they made it very clear that there would be intervention into the market. remember, they can't do qe or

and the thing like that. the only have a couple of tools at their disposal. they could lower rates a little bit further. they made it very clear the intervention would be the first port of call. that is exactly what is now being called by the snb this morning. let's get more market reaction. ben ritchie joins us now. how did the smart money get this one wrong? ben: [laughter] that is not the conversation i was expecting to have this morning. guy: in terms of what the reaction looks like thus far, is it what you would have in terms of -- i understand you price some of these assets. what does it look like? knee-jerknk it is a initial reaction. there are preplanned game plans being played out on the screen.

things like u.k. bags and , that is whature we're seeing. i think it is a time to keep a cool head. look for opportunities at this point. guy: when does the buying start? people believe that the ftse gets things materially -- that is what we are seeing this morning on the downside. you could see a bid start to come in. when is that start to happen? what is the story? you will see things develop most of you have initial strategies being played out. people will start to implement those plans. we see an additional way of selling. look at the prices on the screen today, some down more than 30%. that is a significant move. make anyly doesn't difference. the kind of companies we like to invest in, long-term business is typically selling goods and

services. to cut you am going off and go to 10 downing street. david cameron is speaking. over 33 million people from england, scotland, wales, northern ireland, and theirtar have all had say. we should be proud of the fact that in these islands we trust the people with these big decisions. a not only have parliamentary democracy, but on questions about the arrangement of how we are governed that are times when it is writes to ask the people themselves. that is what we have done. the british people have voted to leave the european union. respected.must be i want to thank everyone who took part in the campaign on my side of the argument, including all of those who put aside party differences to speak in what they believed was the national interest. let me congratulate all those in the leave

campaign. there was a spirited, and passionate case that they made. the british people have an instruction that must be delivered. it was not a decision taken lightly. not least because so many things were said by someone in different organizations about the significance of this decision. there can be no doubt about the result. across the world, people have them watching the choice that britain has made. those marketsre and investors that britain's economy is fundamentally strong. i would also reassure britain in european countries and european citizens living here that there will be no immediate changes in your circumstances. there will be no initial change in the way our people can travel , and the way our goods can to move or our services can be sold. we must now prepare for a

negotiation with the european union. this will need to involve the full engagement of the scottish, welsh, and northern ireland government. to ensure the interests of all parts of our united kingdom are and advanced photonix will require committed leadership. i am honored to be prime for six of this country years. i believe we made great steps. people in work than ever before in our history. increasing people's life a bigger andding stronger society. we're keeping our promises to the poorest people in the world. that love each other to get married no matter what their sexuality. above all, with storing britain's economic strength. to everyone was is

made that happen. i always believe we have to confront a big decisions, not duck them. that is what we deliver the first coalition government to bring our economy back from the brink. we delivered a fair, legal, and decisive referendum in scotland. it is why i made the pledge to renegotiate britain's position in the european union and to hold a referendum on our membership, and have carried those things out. i fought this campaign and the only way i know how. directly andy passionately what i think and feel. head, heart, and soul. i held nothing back. i was absolutely clear about my belief that britain is stronger, safer, and better off inside the european union. referendum wase about this, and this alone. not the future of any single politician, including myself.

the british people have made a very clear decision to take a different path. as such, i think the country requires fresh leadership to take it in this direction. i will do everything i can as prime minister to steady the ship over the coming weeks and months. but i do not think it would be right for me to be the captain that steers our country to its next destination. haveis not a decision i taken lightly. i do believe it is in the national interest to have stability, and the new leadership than required. there is no need for a precise timetable today. tomy view, we should aim have a new prime minister by the start of the conservative party conference in october. delivering stability will be important. i will continue in post as prime minister with my cabinet for the next three months. the cabinet will meet on monday, the governor of the bank of

england is making a statement about the steps the bank and treasury are taking to reassure financial markets. we are also continuing taking forward the important legislation that we said before parliament in the queen's speech. i spoke to her majesty this morning. i advised her of the steps i am taking. negotiation will need to begin under a new prime minister. it is right in this new prime minister takes the decisions about when to trigger article 50 and start the formal and legal process of leaving the eu. i will attend the european council next week to explain the decision the british people have taken and my own decision. the british people have made a choice. to beot only needs respected but those on the losing side of the argument, myself included, should help make it work. --ton is a special country

britain is a special country. we resolve great issues about our future through peaceful debates. a great trading nation with our science, arts, engineering, creativity, respected the world over. i do believe we can be a model of a multiracial, multi-religion democracy where people can come and make a contribution and rise to the highest that their talent allows. although leaving europe was not the path i recommended i am the first to praise our incredible strength. i said before that britain can survive outside the european union and indeed we could find a way. now the decision has been made theeave, we need to find best buy. i will do everything i can to help. i love this country. i feel honored to have served it. i will do everything i can in the future to help this great country succeed.

thank you very much. guy: david cameron making the announcement that he will depart within the next three months. the fact that article 51 up a triggered instantly or there will be a three month pause and the next prime minister will trigger article 50, we will have some form of transmission government taking place. there will be some short-term stability. edwards is in westminster. david cameron will go, but not yet. anna: that was the plan he set out. ory people when they woke up indeed discover the result is akin to this morning asking intently the question how long -- it instantly the question how long can david cameron hold on? he said today was not the time to set up the timetable. we have some clues. he talked about the conservative

party conference. he wants that to be under the stewardship of a new leader. for the trade relationship he wants a new leader to start those relationships. that takes us into the question when article 50 is triggered. maybe that doesn't need to happen. some have argued that for a while. assuming that is to be the case, year time a two horizon. tongs will -- he tries steady the ship before any triggering of that article 50 negotiations. he did say some words that were designed to reassure the markets. he talked of it have the u.k. economy was fundamentally strong. he talked about his record over the past six years. this requiresay fresh leadership. he wants to set it the ship and the weeks -- in the weeks and

months ahead. a monumental day and u.k. politics. breaking 40 years of postwar tradition here in the u.k. with this vote for leave a. what the leader of the u.k. independence party has called the u.k.'s independence day. is interesting, talking but article 50, article 50 containing that within the treaty, we see the rules of exit applying. they won't trigger that for the next three months. what could already be triggered his rumors about who might fill number 10.t what are you hearing on the green? is it boris johnson? what other leaders are being speculated about? bookies is the favorites of as we learned over

the last 24 hours, the bookies can get things wrong. he is the favored. the justice secretary is also someone they have talked about. these are all names that up and talked about for some time. ly led the party. the u.k. independence party certainly gets a lot of credit for putting the issues around immigration and some of those real issues relating to the european union right at the heart of the political debate in the u.k. what role will he want? what will the independent party want? he was trying to maneuver his way into the labour party. he talks about that they turned out to vote for what he calls independence. it is officially the leave of vote. that is the key question.

it is really quite phenomenal. a day when thunder clapped around the skies of london. the people in the building behind me were delivered a serious warning from the british people. they voted to leave the european union. they did it with a majority. guy: thank you very much indeed. plenty more coverage coming from westminster. david cameron confirming that he will step aside after one looks like a three-month period. he is confirming the next leader of the country will be the one that it votes article 50, the mechanism by which the u.k. will start the clock ticking, those two years in which negotiations will take place. let's talk to roger, joining us now on set. should the article 50 be invoked now? >> i think not. threet know where this

months has come from. there's no reason why it has to be three months. i'm i was about to say, maybe saying the new leader will do it straight away. maybe he won't. cameron is saying the new leader will invoke article 50. those timelines are not necessarily correlated. roger: it may be that our european partners will take umbrage at this renegotiation. i think it is britain's advantage to extend this as long as possible. i would be wanting to do all my deals and then invoke article 50. guy: do you think the next leader of the conservative party does game theory? the logic is playing out as game theory would dictate, vote to leave but only just, then negotiate. is that what we're going to see, another referendum? roger: it is not impossible. i think a lot can depend on who the leader is.

some people on the leave site are worried that we sort of went do it. .- won't do it case, i think that would disastrous. what would be the point, to end up as norway? they are still paying into the budget, still accepting migrants without limit, still having to accept most eu regulations. guy: we now have more questions than answers. we thought this was a binary event. i'm beginning to wonder whether that is the case. roger: before the vote, there were suggestions from the continent that if we did vote out, they would say, we might be able to cut you a better deal. guy: that is the question. do you think that will happen? front,negotiation

germany didn't have a great relationship in the first cameron administration. over the last two weeks and months, that has improved. there's plenty of other countries that may want to maybe go down that road. what would a renegotiated settlement look like? roger: we are going to see some severe directions in the eu. the germans may feel they have some sort of deal. i don't really see how that is going to be possible. think about the implications for other eu members. the u.k. votes out. they say, we will give you a better deal and you can stay in. what impact would that have on people in holland, sweden, france? they will say, we want a referendum. we will vote out and get a better deal. mr. cameron: do you -- anna: we've seen the market

reaction. ftse 100 off by 8%. the pound at its lowest in more than 30 years. what do you feel in terms of the ongoing economic picture? roger: obviously there's going to be uncertainty now. i remember what happened when britain was ejected from the rm in september, 1992. the initial move was one of gloom. caroline: but only 4% gloom. roger: what happened then was the media and the public were gloomy and subsequently it transpired that the economy did very well. i think we're going to benefit from the lower bound. the key issue for the government is how to keep the pound down at this more competitive level. it is part of the solution. caroline: does it worry you that airbus says it is reviewing its

u.k. investment strategy? roger: i think we've got to keep a close eye on things like this. there may well be various firms that reduce their involvement in britain. i think it is incumbent on the chancellor to paint a picture of the outlook for britain and businesses in britain that persuades these firms to stay with their existing contacts. caroline: we have breaking news now. merkel is making a statement in berlin at 12:30 local berlin time, 11:30 a.m. u.k. time. the six founding members of the european union will be gathering in berlin tomorrow. so much work to be done over the weekend. we will hear from the leader of germany, who saw the u.k. as an ally. she will speak in two hours

time, i believe, three hours. do you thinkhat she's going to say? roger: probably some platitudes, the british people have spoken, blah blah blah. say --at is she going to it is going to give the market a sense of direction. his germany capable of providing a leadership position. do you think the rest of europe will rally around her? roger: i would be surprised if she said anything medical in public. she's got to talk to the french president and the other members of the eu. i think it will be going much too far the day after the vote to come out and say, we want to talk. i would be very surprised if she says something very big. guy: do you think the u.k. leaves the eu? roger: i do, but it may be a

tortuous process. guy: who would you like to be the next prime minister? who has the best ability to negotiate what we need? roger: i don't know the individuals in question well enough to judge that. whoever it is should be able to unite the conservative party. this is going to be a difficult task. this has been a bitter debate. isn't right that cameron is staying on for three months? roger: yes. i was well aware that that is what all people on the leave side hoped and intended. this has played out pretty much for the best. guy: what does it mean for british austerity? roger: we don't know. very interesting to see becomes chancellor. mr. osborne will be a job much longer. the new man has the opportunity

to recast policy. austerity,has been but it has been kind of austerity light. do you think the bank of england should be providing the stimulus the u.k. needs? should raise the cut? walk me through the policy levers that need to be pulled. roger: what i would be seeking to do is ensure the pound stays at a competitive level. i probably would cut interest rates. i probably would do more qe. i wouldn't do what mr. osborne threatened, cut spending and raise taxes. need to settle down. we need to bring some renewed sense of confidence. i think the bank of england could have. i wouldn't be surprised to see interest-rate cuts. guy: do you think the central bank should boost sterling? cutting rates would have that effect on the british pound, but you kind of look at the various

options -- what they don't want to do is do much to boost sterling. sterling is the release valve that maybe about the british economy to do what it wants to do. roger: i do the view that the lower pound is going to help a lot. the last thing the bank of england should try to do is encourage sterling higher. when confidence in this country recovers, how are they going to keep the pound down? guy: in some ways, democracy has delivered what it was meant to deliver. revolutions typically are left field event not connected through the ballot box. when you look at how this story is going to move on, we have mr. trump arriving in the u.k. shortly to open his scottish golf course, interesting to see what he has to say. the ballot box is still a valid mechanism for changing the

direction of government. has improved that way in the past. if you look at the way we used to analyze politics, it was left and right. it seems we now have a more rich-four. the way politics has to be thought of is changing. is it reassuring that the ballot box is still delivering? roger: depends what sign of the debate you are on. the european union has been a project of the european elite. we in britain forget that we are not the only eurosceptics. across europe, there are plenty of them. to byesent being dictated people who aren't elected. guy: thank you very much indeed for your thoughts. roger bootle joining us from capital economics. caroline? caroline: we've got another view from a city leader, cfo of munich read joining us now.

thank you for your time. give us a sense of where see the future of london as a financial hub. will your business start to pull away from the united kingdom? >> no. for us, london will be very important insurance because for us, the share of the domestic business is quite high. euros -- [indiscernible] a lot of that is domestic business. caroline: are you worried about the u.k. as an economy as it leaves the eu? >> we are. for the u.k. blow economy, but also for the eu as a. we very much regret the decision of the british people, but we

have to live with it. we have to look forward. this is not the end of europe and this is not the end ave maria u.k. economy. caroline: how will it change your business model? >> not a lot. you mentioned the role of the market. some businesses written with a worldwide scope. there could be some shift to other major insurance places like singapore or new york. there will be some changes, but not a radical shift for us. caroline: do you worry about the domino effect in the rest of the eu? are you worried about spain, france, leaders looking toward their own referendum? >> yes, we are worried.

there's nothing to debate about it, but we hope this is now the chance for a kind of new start for the eu, with responsible policies, with a look at the competitiveness of the eu. we see chances, not only risks. caroline: great to have you for a discussion. it seems as though munich re's share prices trading down, in line with the rest of the dax. guy: interesting to see all those market development. unfairly make moves we are seeing a moment. and merkel spoke after the vote. [indiscernible] on's find out what is going in the trading floors. matt miller, over to you. matt: thanks very much.

i'm here with joe at etx. leveragedctually the your clients coming into this, but you have to stop a lot of clients, call a lot of margins. >> the moves we saw are on resident it. these are really significant moves. i don't think anyone expected this. last night, it didn't look like this was going to play out. it is once-in-a-lifetime. matt: what do you think about andintervention by the snb the boe? >> they can't really do anything at the moment. i don't think is particularly helpful. intervened,e they it wasn't helpful for anyone. matt: any reaction to david cameron announcing his pending

resignation? results,we saw the that was probably going to be priced in. i guess it is probably better. he was going to go. it gets rid of that uncertainty in the market. at least that is going. but we are going to see continued uncertainty. matt: the pound coming down by 10%. you see anyone coming in to pull it up? >> i don't think so, maybe a small bounce. i think you will see the funds coming to work. they are really going to put money to play. i think we will see continued down for the next couple weeks. matt: we saw a big flight to safety. then had its biggest move. what do you think this means for the fed? >> very lucky they didn't raise

rates last month. , ifuld say the next move eurozone", is probably going to be easing. matt: so you think we are going to see this spreading around the world as far as growth is concerned? >> i think there's a real risk that it spreads into your. -- into europe. if that happens, the eurozone experiment, the euro currency, you have to question whether that can survive. matt: thanks so much for joining us. i know you are very busy. he runs trading at etx. back to you. >> inevitably, there will be uncertainty and adjustment following this result. as the prime minister said this morning, there will be no initial change in the way our people can travel, the way our

goods can move, or the way our services can be sold. it will take some time to establish new relationships with europe and the rest of the world. some volatility can be expected. but we are well-repaired for this. -- well-prepared for this. the bank of england having gauged in extensive contingency planning. the chancellor and i have remained in close contact. the bank of england will not hesitate to take additional measures as required, as markets adjust, and the u.k. economy moves forward. those economic adjustments will be supported by a resilient u.k. financial system, one that the bank of england has consistently strengthened. the capital requirements of our largest banks are now 10 times

higher than before the financial crisis. the bank of england has stress tested those banks against scenarios for more severe than our country faces. u.k. banks have raised over 130 capitalpounds of new and now have more than 600 billion pounds of high-quality liquid assets. that substantial capital and huge liquidity gives thanks the flexibility -- gives banks the flexibility they need to lend during challenging times. as a backstop and to support the markets, the bank of england stands ready to provide more than 250 billion pounds of additional funds. england is also able to provide substantial liquidity on currency if required. we expect institutions to draw on this funding if and when

appropriate, just as we expect them to draw on their own resources to provide credit, to support markets, and to supply other financial services to the real economy. in the coming weeks, the bank will assess economic conditions and consider any additional policy responses. a few months ago, the bank judged that the risks around the referendum where the most significant near-term risks to financial stability. to mitigate them, the bank has put in place contingency plans. these begin with ensuring the core of our financial system is well-capitalized, liquid, and strong. this resilient back to my liquidity in starving in foreign currencies and all these resources will support quarterly market functioning in the face of short-term volatility.

the bank will continue to cooperate with all relevant domestic and international authorities to ensure the u.k. financial system can do its job of concentrating on serving the real economy. neweconomy will adjust to trading relationships that will be put in place over time. it is the public and private conditions that will determine long-term economic prospects. the best contribution of the bank of england is to continue hammerue relentlessly responsibilities. these are unchanged. we've taken all the necessary steps to prepare for today's events. in the future, we will not hesitate to take any additional measures required to meet our responsibilities as the united kingdom moves forward.

thank you very much. governor mark carney of the bank of england reassuring the market that the bank stands ready to ensure there is stability in the financial them. couple of things to point out. the ftse is back of the 6000 mark. we are receiving a return. unsurprising that we're seeing sterling down so much and so much of the ftse has external earnings. the pound is just beginning to stabilize as well. rate atown on the cable 1.3832. you are still down by 7%, but the pound is beginning to catch a better paid. let's talk about the pound. let's talk about the actions the bank could take.

manus cranny is outside the bank. the governor making it clear that contingency plans are in place. men nine i think he delivered -- manus: i think he delivered two messages very clearly. there's liquidity aplenty. he's been in touch with osborne. there's been extensive planning. the bank of england will not hesitate to take action. he's talking about additional quarter of a trillion liquidity for the markets. he stands ready to defend this market. the question is this, politically, we are entering a new void. cameron is going in three months. the man who is running this institution, he ran the bank of canada during a financial crisis. if there's one governor in the world who has the wherewithal,

the knowledge, the tone, the capacity to deal with this, probably it is this canadian man. he knows how markets react and they are ready. hours, ifext 48 there's much more volatility, what action will they take. the market is pricing 50% probability of a quarter percent rate cut. this is a man dealing with crisis while politics plays out. caroline: thank you very much, manus cranny. we're going to talk more about the foreign policy ramifications. thank you very much indeed for joining us. what does this mean for the eu? >> it is a shock. it is a historical day. now we have to deal with what i perceive as a real catastrophe, the worst in the history of

european integration. we have to contain any kind of contagion. importantnot the most issue we have to deal with. we have to deal with russia, ukraine, syria, libya. it is now more a kind of technical negotiation about that and we can't afford to distract from the very much existential challenges facing. caroline: we've heard from the national rent in france, the right-wing in spring -- national front in france, the right-wing in spain. >> the one thing we can learn from the british debate is we must not allow the indo-european europeans to dominate the public debate. caroline: but the pro-europeans

failed in the united kingdom. could they not do the same in other countries? >> i think we have to, for the first time, fight for our case for european integration. the fears and anxieties of globalization stimulate some citizens to revert to nationalism, and we have a stronger case that only being integrated makes people better off and more secure. if we do not stand up and speak up, then we will have erosion take place. caroline: [indiscernible] idea howt have a clear she perceives this catastrophe. she will certainly contribute and your retains control

pe gives a united answer and demonstrates determination to keep europe together. caroline: it has been wonderful having you here. thank you very much indeed. the leader of the foreign affairs committee in german parliament. back to you. phenomenal moves, record moves, never seen the pound move like it. guy: the pound is the release valve, it seems. the ftse 100 is back above the 6000 level. it is not known as much as the continental markets. the reason is the british pound. as you can see, beginning to find a floor. that is something to be aware of. we've got so much more coverage on this story. special weekend coverage this morning on the way through the

weekend until monday morning. we're going to be back on saturday. lots of specials coming through on sunday as well. up next is "the pulse." ♪

francine: brexit begins. the u.k. votes to leave the eu. cameron resigns. mr. cameron: the british people have made a decision to take a different path. i think the country requires fresh leadership to take it in this direction. i will do everything i can to steady the ship over the coming weeks and months. but i do not think it would be right for me to try to be the captain that steers our country to its next destination. francine: stocks plunge as brexit triggers world recession fears. says f england