So the results are in, but what happens now?
Sterling falls, stock market falls, debt interest rates rise
The impact of the Brexit vote is likely to be considerable. The pound will almost certainly fall significantly, as will share prices, with banking stocks and multinationals hardest hit.
It is possible that in order to try to stem the fall in sterling, the Bank of England will put up interest rates – at least in the short term. This would have a very “real world” effect, as it would mean the cost of mortgages and borrowing would immediately rise for us all.
How Brussels will react now that the unthinkable has happened
Michael Saunders, a new member of the Bank of England’s Monetary Policy Committee, has said he expects the pound to come under severe pressure. When he was working for Citibank, he wrote that Brexit risks were “nowhere near priced yet”, adding that Britain should expect between 15 and 20 per cent depreciation of sterling against its main trading partners.
The Bank has already said it has contingency plans in place in the event of Brexit. Some of these plans will take place regardless of the vote. It will hold additional auctions of sterling to ensure the banking system has sufficient funds to operate in a potentially chaotic moment.
George Osborne will change his tune
While all the rhetoric of the campaign has been about the catastrophic consequences of Brexit, the Chancellor will now have to do everything he can to calm the markets.
Expect him to emphasise how long it will take for a negotiated exit to take place, and expect him to reassure the markets that there will be no change in Britain’s relationship with Europe for at least several years.
The name of the game will be buying time. Mr Osborne may also announce he will stand down as Chancellor when a new Tory leader is elected.
He would almost certainly rule himself out of the race to succeed David Cameron and would probably jump before he is pushed out of the Treasury.
David Cameron will invoke Article 50 of the Lisbon Treaty
This is a legal mechanism by which Britain withdraws from the EU. Mr Cameron could do this at any time, but it is perhaps most likely to happen at a meeting of EU heads of state on 27 June. Given Brexit, this meeting will be of crucial importance. It will be the first time that all 28 member states will be able to take stock of the decision.
But don’t expect any decisions at this meeting – Mr Cameron will not be the person negotiating Britain’s exit, so anything of substance will be put on hold until a new Prime Minister is in place.
Boris Johnson and Theresa May are likely to announce they will stand to become the next Prime Minister
Boris Johnson is the man to beat in the race to become David Cameron’s successor. In these circumstances, the only two figures who could realistically challenge him are Michael Gove and Theresa May. Mr Gove may rule himself out, preferring to be Boris’s kingmaker rather than a contender. But Mrs May is almost certain to stand.
She has kept a low profile during the campaign: she has come out in favour of Remain (which will disadvantage her), but she might still come through to win as a steady but tough hand on the tiller through turbulent times.