Financial markets were in turmoil and sterling fell in the foreign exchanges today by as much as 10 per cent against the dollar after UK voters chose to leave the European Union, ending Britain’s membership of a transnational organisation it joined in 1973.

With media reports scoring the referendum vote at the time of writing as 51.8 per cent to leave the 28-state bloc and 48.2 per cent to remain in it, the result highlighted differences between London – home to Europe’s financial capital – where almost 60 per cent of voters chose to remain – and the rest of the country. Highlighting another division, in Scotland most electors wanted to remain. The Brexit referendum galvanised UK public opinion: 72.2 per cent of voters chose to exercise their right to vote, versus the 66.1 per cent who chose to vote in the 2015 general election.

Predictably, given that markets had started to price in a “remain” result earlier this week, sterling fell around 10 per cent to a 30-year low of $1.34. The price of gold – a measure of investor alarm, surged up to $1,350 an ounce (data: BullionVault) in early dealing; the yellow metal jumped 22 per cent overnight against sterling. By 11am London time, BullionVault said users of its platform had traded £23.5 million of vaulted gold and silver since midnight using its live online trading exchange, which is more than two weeks’ worth of average trading in 2015.

The Bank of England reportedly said it is "monitoring developments closely" and will "take all necessary steps to meet its responsibilities for monetary and financial stability". The central bank said it has made “extensive contingency planning" and is "working closely with HM Treasury, other domestic authorities and overseas central banks" in the aftermath of the vote.

The UK faces two years of negotiations over how to disentangle itself from the EU. There is uncertainty over whether the country will transfer to a Switzerland/Norway-style relationship, in which it would retain access to the European Single Market.

Capital Economics, the independent research firm, said the sterling exchange rate could drop as far as $1.20, but also struck a cautionary note on how negative the economic and market consequences of Brexit will be.

“The outcome clearly creates considerable short-term uncertainty which is likely to weigh on the UK economy in the coming quarters. Business confidence will presumably drop sharply for a while and doubts will surround David Cameron’s position. Meanwhile, the firm vote for Remain in Scotland will fuel speculation of a second Scottish Independence referendum,” the firm said.

“Nonetheless, we maintain the view that the ultimate damage will be rather smaller than some of the more pessimistic projections have suggested. After all, the UK will remain inside the EU for at least two years and possibly longer. This will allow time to clear up some uncertainties, not least over the UK’s future trading relationship with the remainder of the EU and rest of the world. Meanwhile, although sterling’s decline will lift inflation (albeit from a very low level), it should also help to protect the export sector. There are parallels here with the UK’s exit from the ERM in 1992,” Capital Economics said in a note.

“At the same, the policymakers’ emphasis will shift from trying to influence the outcome of the vote to cushioning its impact. The Bank of England’s Monetary Policy Committee is likely to look through the inflationary consequences of the drop in the pound and either keep policy very loose for longer or loosen it further. A cut in interest rates and an expansion of the Bank’s quantitative easing programme are both possible, as well as co-ordinated action with other central banks to maintain liquidity and smooth currency movements. Meanwhile, we very much doubt that Chancellor George Osborne will carry out his widely-derided threat to tighten fiscal policy in a post-Brexit emergency budget,” the firm said.

In recent weeks, it has been clear from anecdotal evidence and commentaries that most wealth management firms wanted the UK to remain in the EU. There have been fears that a departure will mean some banks, for example, might need to move some of their operations to the continent to be sure of retaining access to the EU Single Market. JP Morgan’s chief executive, Jamie Dimon, for example, had warned of job cuts in London and a shift in some functions. Private client advisors dealing with issues such as high net worth immigration, meanwhile, had warned that Brexit could make the UK less attractive as a destination (see here). With large numbers of EU nationals working in London’s financial district – such as those from France and Germany – the vote could see thousands of people, and maybe more, having to return to the continent depending on how their residence status is amended.

With analysts and traders working through the night in several countries to follow results of the vote, reactions poured in early today. According to UBS Wealth Management, for example: “Our initial assessment is that growth in the second half of this year will slow further. The Bank of England will at the very least keep interest rates on hold, but a cut is very likely. Other forms of stimulus are also possible.”

It added: “In our view, it is reasonable to expect that sterling will settle in the mid-1.30s level against the US dollar until some clarity emerges. Beyond this level, we would note that sterling would be significantly undervalued and markets would probably be reluctant to sell. For the FTSE 100, we expect the falls to be cushioned by a decline in sterling.

"The FTSE 100 futures market is currently showing a fall of around 7 per cent. In the run up to the referendum, we identified that on a vote to leave the FTSE 100 could move below 5,600 (more than 10 per cent fall) over a 12-month period. In our view, companies and sectors most leveraged to the UK economy could therefore be expected to continue some of their pre-referendum underperformance. This includes sectors such as the financials, consumer discretionary, and the FTSE 250 Mid Cap Index. Meanwhile we would expect defensive and international segments of the market to outperform, as they have less exposure to the UK economy and should be supported by a weaker pound,” Switzerland's largest bank said.

“For the gilt market, it is it is likely that yields will fall as investors digest the prospect of weaker GDP growth, the prospect of interest rate cuts, and the potential for further quantitative easing by the Bank of England. In the credit markets, the stability in credit spreads is unlikely to persist as risk premiums rise,” it added.

Managers from T Rowe Price, the $765 billion global asset manager, also reacted to the UK public’s decision to leave the European Union.

“Those who believe Brexit is a UK problem are misunderstanding the impact it will have globally. They’re forgetting the impact that Greece had – and Greece is much smaller than the UK, and not a financial centre,” said Arif Husain, head of international fixed income at T Rowe Price.

“The vote to leave could result in a global recession. It’s likely that the chances of a global recession have risen above 50 per cent,” Husain said.

On a more positive note, Mark Littlewood, director-general of the Institute of Economic Affairs, a pro-market think tank, said: "The UK government must now prioritise securing a mutually beneficial trade deal with the EU and outside the EU, taking the first step towards a more independent and global future. There is no need to trigger Article 50 immediately; the negotiation process should be decided upon carefully and calmly without unnecessary knee-jerk reactions. Leaving the European Union has also opened up the possibility for the UK government to adopt a much fairer, non-discriminatory immigration policy that no longer puts non-EU nationals at a disadvantage and is instead applied equally across the world."

David Sproul, chief executive of Deloitte UK, said: “The British public have spoken and made clear that they see the UK’s interests best-served by leaving the European Union. While the UK has opted for a future outside the EU, Britain remains a competitive, innovative and highly-skilled economy and an attractive place for business.  However, as indicated by today’s market volatility we are likely to see a period of uncertainty.  Businesses need to ensure they are set up to navigate the immediate risks and impacts of an exit, and have the processes and people in place to manage a period of upheaval.

“Against this backdrop of uncertainty, British businesses must continue to be proactive in finding ways to raise productivity and drive growth. The UK remains a world leader in R&D and a hub for innovation. This will help businesses capitalise on the opportunities and respond to the competitive threats created by the leave vote. They must also play an active role in setting a vision for a new, post-EU environment which is open, pro-growth and delivers prosperity and opportunity for all,” Sproul said.