Money (6)

The value of the pound has plummeted to its lowest since 1985 as the UK voted to leave the European Union.

Sterling had climbed to its highest point in 2016 so far at $1.50 against the US dollar as early polls suggested the Remain vote would win.

But it soon started to fall as Remain's performance failed to meet expectations in early results. It dropped to $1.43 on strong wins for Leave in the North East of England before plunging again around 3am to the 31 year low of $1.31 - a 10% fall.

David Cameron has said he will resign by the Conservative party conference in October, explaining he is not the right person to lead the UK through negotiations to withdraw from the EU.

In a statement, the Bank of England said it has extensive contingency plans to deal with the economic and financial fallout of a Leave vote. It said: "The Bank of England will take all necessary steps to meet its responsibilities for monetary and financial stability."

Governor of the Bank of England, Mark Carney, said the Bank “will not hesitate” to introduce additional monetary policy to protect the British economy and financial markets, if required.

The euro also fell 3.3% against the US dollar - the single largest single-day drop since the currency was introduced.

Sources in the City said banks would rather David Cameron waits to trigger Article 50 to start the legal process. Some have suggested it could be delayed to allow the UK more time to negotiate the best possible deal to leave the EU.

Jeremy Cook, chief economist at international payments company World First, said the referendum result was "killing the pound". He said that the currency did not have a day as bad as this during the global financial crisis.

Earlier in the night, Mr Cook said: "Fears over the twin deficits – current account and budget – alongside concerns over a possible recession, interest rate cuts or increased quantitative easing from the Bank of England are all reasons why GBP will be very unloved.

On Wednesday, foreign exchange companies saw a huge spike in demand on Wednesday, with No.1 Currency reporting queues outside many of its stores across the UK. The company said it saw a 70% rise in customers on the eve of the referendum as holidaymakers looked to get as much as they could for their money before a Brexit vote.

Speaking before the referendum result, Simon Phillips, retail director at No.1 Currency, said: “Demand has rocketed for all foreign currencies, but Euros and Dollars are proving especially popular.

“Our network of high street stores came close to running out of the most popular currencies on Wednesday, and as high demand continues today we’ve dramatically increased stock levels to cope with the surge in demand during the final hours before the result is announced."

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