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(Photography by Harald Richter). (photo: Harald Richter)
(Photography by Harald Richter).
24.06.2016, 12:22

Cameron Resigns as UK Votes to "Brexit" EU

Author: Staff Editor

UK Prime Minister David Cameron has announced his resignation following the historic decision by the people of the United Kingdom to leave the European Union, as the unsettling impact of a "Brexit" is felt in currency and equity markets.

UK Prime Minister David Cameron has announced his resignation following the historic decision by the people of the United Kingdom to leave the European Union, as the unsettling impact of a "Brexit" continues to be felt by investors.

Speaking outside 10 Downing Street this morning, the Prime Minister said he had formally notified Buckingham Palace of his decision to step down, and believed "fresh leadership" was needed in future negotiations with the EU.

Cameron also confirmed he will stay in office to "steady the ship" until a replacement is appointed, although it is unclear whether a general election will be called in the meantime.

Article 50 of the Lisbon Treaty provides the legal framework for the withdrawal of a Member State from the 27-country European trading block, although its current wording has never been tested.

In particular, the Article stipulates parties must reach agreement within 2 years of its invocation by a Member State, although there have been suggestions from Brexit supporters in response to a statement that the Prime Minister intended to invoke it sooner rather than later, that any formal application might be postponed until discussions with Britain's former European trading partners have taken place.

With an Ipsos MORI Political Monitor Poll in March suggesting Labour Party leader Jeremy Corbyn has a negative public perception rating, and evidence of disunity within his party's ranks - with former Foreign Secretary and potential rival David Miliband even publicly declaring him to be 'unelectable', former London Mayor Boris Johnson is widely tipped to succeed David Cameron as Prime Minister.

In an early indication of global investor sentiment, the Pound plunged to a thirty-year low against the U.S. Dollar in overnight trading as it became clear a "Leave" vote was likely.

Similarly, the FTSE 100 index of Britain's leading shares has fallen by around 5 per cent from yesterday's close, although this is a recovery from an 8 per cent drop when the London Stock Exchange opened this morning.

The broader FTSE 250 index which includes mid-cap facility support service providers Interserve, Mitie and Carillion, also experienced a significant opening fall of 11.7 per cent, although shares are now rallying.

In a separate development, Governor of the Bank of England Mark Carney moved to steady markets as it was reported the Central Bank of Japan and European Central Bank were preparing to ease any short-term impact for money supply, when he said:

"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 far more severe than our country currently faces. As a result of these actions UK banks have raised over a £130 billion of new capital and now have more than £600 billion of high quality liquid assets. That substantial capital and huge liquidity gives banks the flexibility they need to continue to lend to UK businesses and households even during challenging times".

The Brexit decision is expected to have wide-reaching consequences for public sector facilities services procurement across the UK which has hitherto been governed by the European Union's public procurement rules.

In contrast to European health, safety and environmental (HS&E) protection which has been welcomed for importing higher standards into domestic UK law, EU public sector procurement policy has been criticised by many of the world's largest facility services providers (including ISS A/S), for promoting a "one size fits all" approach to procurement that restricts the number of bidders that qualify for contracts and even stifles development of customer needs-based solutions.

 

 

 

 

 

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