The Bank of England will take "all necessary steps" to protect the financial markets in the wake of the vote to leave the European Union, it confirmed this morning, in its first intervention since the result of the referendum became clear.
In a statement issued at 7am this morning, Threadneedle Street said:
The Bank of England is monitoring developments closely. It has undertaken extensive contingency planning and is working closely with HM Treasury, other domestic authorities and overseas central banks. The Bank of England will take all necessary steps to meet its responsibilities for monetary and financial stability.
Mark Carney is reported to have held a conference call with major banks at 5.30am this morning to discuss the implications of the vote.
Sterling suffered its sharpest ever one day fall overnight, tumbling 15 cents – or nine per cent – against the dollar to $1.3548.
The FTSE 100 is also poised for one its worst ever days, with futures pointing to an 8.2 per cent – or 500 point – fall at the open.
Despite talk of a bank holiday or a suspension in trading, the London Stock Exchange confirmed the markets will open, as usual, at 8am.
The daily pre-market auction will take place at 7.55am, as usual. Though if individual stocks open eight per cent down on yesterday's close, there will be a five minute pause before another auction takes place – meaning trading in many individual companies on the open market may not begin until 8.05am.
Any time a stock rises or falls by eight per cent from this level would trigger another suspension in trading.
Mark Carney will deliver a statement this morning with further details of the Bank's plans, but will wait until after David Cameron makes his first speech after the most dramatic event in recent political history.