The markets called it early and called it big: the remain vote wins and Britain stays in the EU.

It may go down as one of the worst calls in financial history.

With hours to go before the final result Wall Street markets had rallied and the New Zealand dollar spiked as high as US73c.

But British voters had other ideas. History has unfolded before us and now markets must face up to the consequences.


The political fallout will be equally dramatic as Britain and the EU work through whatever plan they have for the break-up.

In reality not much of this has been thought through.

The uncertainty around it ensures that we face days if not weeks of market turmoil.

We've already seen the UK pound collapse and equity markets fall.

Central banks are going to have to respond to ensure that already weak economic growth doesn't fall off a cliff.

That means we could see the US Federal Reserve keep interest rates on hold longer and our own Reserve Bank is more likely to cut again - perhaps twice - before the end of the year.

Despite falling hard from the morning's highs the kiwi dollar has stayed pretty solid suggesting most see our economy as relatively well buffered from the direct impacts of the Brexit.

The trade implications are complex but unlikely to be disastrous given Britain is now just our fifth largest trading partner.

Our bigger concern is whether China and the US can keep a lid on the contagion effect.

A short sharp event is manageable, we saw that in January as markets took a dive.

In Europe, things are more difficult.

Interest rates are already in negative territory and the European Central Bank has few if any cards up its sleeve.

The only upside is that Europe has been such an economic basket case for so long there are already very low expectations about its contribution to global growth.