UK Votes to Leave the EU, Pound Plunges to Lowest Level Since 1985

LONDON, June 24 - Britain voted to leave the European Union, ending 43 years of membership, and sent the pound sharply lower against the dollar in overnight trading.

Final results show Leave won with 51.9 percent of the vote to 48.1 percent for Remain. That is 17,410,742 votes to 16,141,241. Turnout was 72.2 percent. Scotland, Northern Ireland, London and Gibraltar voted to remain.

Polls and bookmakers had pointed to a Remain win, and markets were largely unprepared. Ipsos MORI's final poll, taken Wednesday and Thursday, showed Remain ahead 54 percent to 46 percent.

The pound lost 3 percent within moments of the first result showing a strong Leave vote in Sunderland. It fell as far as $1.3224, from about $1.50 when exit polls were released, a drop of more than 10 percent and the lowest level against the dollar since 1985. Against the euro it fell as much as 6.5 percent.

The map was split. Sunderland voted 61 percent to leave, while Newcastle backed Remain with only 50.7 percent. London had strong Remain majorities.

Prime Minister David Cameron, who called the referendum and campaigned to stay in, said in a statement outside Downing Street that he will step down by October. He said he would try to "steady the ship" over the coming weeks and months.

Nigel Farage, leader of the UK Independence Party, claimed victory. "Let June 23 go down in our history as our independence day!" he said.

The Bank of England said it is monitoring developments closely. Standard & Poor's warned that Britain is likely to lose its AAA credit rating. The euro also fell sharply against the dollar as investors moved to safer assets.

Why it matters: Britain's 43-year membership ends with a vote nobody in the markets had priced in. The formal exit process starts when the government notifies the EU under Article 50, and Cameron's planned departure leaves open who will do that and when. Until then, businesses that trade with Europe face an open-ended wait on the terms of the split. Investors do not like that, and the currency move on Friday morning shows it.

One analyst, Piers Hillier of Royal London Asset Management, said he expects a recession and "unstable market conditions lasting for between three and five years."

For now, the pound is the number to watch.