The result sets the U.K. up for years of bitter divorce talks with the first round likely to come at an EU leaders’ summit next week. Britain must now count the economic and financial cost of an exit that Cameron warned would spark a recession.

JPMorgan Chase & Co. and HSBC Holdings Plc have said a so-called Brexit would lead them to move thousands of jobs out of London. Central bankers pledged to safeguard financial stability.

Johnson win

The outcome is a victory for Boris Johnson, the former mayor of London who broke with former schoolmate Cameron to help lead the “Out” campaign and installs him as a potential successor. The vote widens fissures in the U.K. by raising the prospect of another push for Scottish independence and leaves London as a pro-EU island. Johnson was greeted by jeers and boos when he briefly emerged from his north London home this morning.

Beyond Britain’s shores, populist insurgents in France, Italy and the Netherlands cheered, as did Donald Trump. France’s Marine Le Pen called for an immediate referendum there. Above all, the outcome shows just how disillusioned western voters have become with the political establishment for failing to deliver more inclusive economic growth in the era of globalization.

“This is the biggest shock to European politics since the fall of the Berlin Wall,” said Rob Ford, professor of politics at Manchester University.

In Europe, governments from Ireland to Malta convened emergency cabinet meetings to discuss the way forward.

President Barack Obama issued a statement saying that the "special relationship" between the U.S. and U.K. would endure. "The United Kingdom and the European Union will remain indispensable partners of the United States even as they begin negotiating their ongoing relationship to ensure continued stability, security, and prosperity.”

Crisis echoes

The market rout had echoes of the 2008-2009 financial crisis. “Panic is palpable,” said John Gorman, the Tokyo-based head of U.S. debt trading for Asia and the Pacific at Nomura Holdings Inc., even before European markets opened.

The pound fell to as low as $1.3229, before trading down 7.4 percent at $1.3784 at 2:57 p.m. in London and still on course for its worst day on record -- far exceeding its previous record decline in 1992. That’s when it fell 4.1 percent on Black Wednesday, the day the currency was forced out of Europe’s exchange-rate mechanism. The MSCI World Index of stocks fell 3.9 percent and gold surged 4.6 percent.

Finance officials have are already started firefighting. The Bank of England said it was “monitoring developments closely” and will take all necessary steps to ensure stability. Governor Mark Carney may end up having to cut interest rates or revive quantitative easing. He pledged an extra 250 billion pounds ($345 billion) for the financial system.

‘Negative’

“This is not such a good day for Europe,” Deutsche Bank AG Chief Executive Officer John Cryan said in a statement. “We cannot fully foresee the consequences, but there’s no doubt that they will be negative on all sides.”

Financial services, which employs more than 2 million people nationwide and paid 66 billion pounds in tax last year, is particularly threatened. The City of London’s status as a financial capital may now be eroded, especially if the U.K. loses rights that allow its banks to sell their products and services throughout the EU.

JPMorgan CEO Jamie Dimon, who has 16,000 employees in London and other British cities, said this month a vote to leave could mean a quarter of those jobs might be cut. Morgan Stanley and HSBC have made similar noises.

Global companies said they would reassess their U.K. investments in the wake of the vote. Hankook Tire Worldwide Co. of South Korea may diversify “global production capability”; a board member of Japanese car-parts maker Exedy Corp. said it may have to consider moving its U.K. office to continental Europe. Maurice Levy, chief of French advertising giant Publicis Groupe SA, said it was “out of the question” to open new sites in the U.K. as the advertising market will “surely suffer.”

The result marks a victory for a rag-tag band of politicians and executives who took on Britain’s establishment and won. Conservatives Johnson and Michael Gove broke with Cameron to form a loose alliance with the U.K. Independence Party, arguing that the island nation can go it alone in an era of globalization. It was also a massive victory for Farage, who has campaigned for the U.K. to leave the EU for a quarter century.

“Let June 23rd go down in our history as our Independence Day,” said Farage, a former commodities broker.

Tapping into voters’ worries about immigration, the pro-Brexit leaders said that Britain can only exert full control over its borders and budget by leaving the EU. That promise overcame repeated warnings from Cameron and a cast of supporters that included the Pope, the Archbishop of Canterbury and the U.S. president.

Exit trigger

The next steps are unclear as politicians in Britain and the rest of Europe feel their way through the unprecedented situation. Cameron said that the U.K. will wait until a new prime minister is in place before triggering exit talks and invoking Article 50 of the Lisbon Treaty.

That threatens an immediate clash with Germany, which signaled it will push for a quick exit. Negotiations should be concluded within a maximum of two years, said Manfred Weber, who heads the conservative EPP group in the European Parliament. “There cannot be any special treatment,” Weber said on Twitter. “Leave means leave.”

For the EU and its most powerful leader, German Chancellor Angela Merkel, the result presents yet another challenge after years of crisis. EU unity has already been sorely tested by Greece’s seemingly endless debt woes, sanctions on Russia and the Syrian refugee crisis.

Now, Merkel and French President Francois Hollande need to rally confidence in a project increasingly questioned by populists like Le Pen in France and Italy’s Five Star movement. To Merkel and Hollande, who discussed the outcome for 20 minutes on Friday morning, the EU is a symbol of Europe’s resurgence from World War II.

Tough talks

Among the first decisions for Merkel and Hollande will be how tough they want to be on the U.K. in the upcoming negotiations, especially as some countries will surely want to make an example of Britain to stop others from leaving. The first indications of their joint position may come on Monday, when Hollande travels to Berlin ahead of a June 28-29 meeting of EU leaders. Foreign ministers from the EU’s six founding members are due to meet in Berlin on Saturday, and finance ministers could confer as soon as this weekend.

A key question now will be who leads Britain’s negotiations after one of the biggest foreign-policy failures by a British prime minister in the modern era.

Who’s in

Johnson is the bookmakers’ favorite to succeed Cameron. Other potential heirs include Justice Secretary Gove and Home Secretary Theresa May. Whoever takes over is likely to seek his or her own mandate with another general election, meaning voters across the U.K. may have to go to the polls for a third time in two years.

The vote doesn’t end the sovereignty struggles. Scottish First Minister Nicola Sturgeon said the option of another independence referendum for Scotland, where 62 percent voted to “Remain” in the EU, is “on the table.” The vote also complicates things for the Irish, who will now face barriers to the free movement of goods and workers between the Republic of Ireland and Northern Ireland.

“I don’t know the forces they have unleashed in winning this,” said Steve Fielding, a professor of political history at the University of Nottingham. “I don’t know this is in the capacity of any one person to control.”

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