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  1. Sterling falls more than 3% to new 31 year-low against dollar
  2. Airline, building company and bank shares hit hard as FTSE 100 closes down 2.5%
  3. Former Bank Governor Mervyn King: 'People shouldn't panic'
  4. George Osborne indicates no Emergency Budget

Live Reporting

By Karen Hoggan

All times stated are UK

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Good night

Well, that's it for another day from the Business Live team. 

It's been a day dominated once more by the dramatic fall-out from UK's vote to leave the European Union. 

Thank you for staying with us. 

We'll be back as usual tomorrow with all the latest developments so to stay up to day do join us then.

Half of consumers 'cancel or delay major purchases'

For sale sign

Optimism is outweighing pessimism among consumers following the Brexit vote, according to market research agency Consumer Intelligence.

Its study shows 48% of adults feel optimistic compared with 32% who are pessimistic - with 20% of consumers saying they're neither optimistic nor pessimistic.

However, the research also found the Brexit vote is increasing uncertainty with more than half of consumers who were planning major purchases this year cancelling or deciding to wait and see.

About  21% of people who said they were planning to buy a house, buy a car, invest in the stock market or withdraw money from their pension said they had cancelled plans.

A further 29% said they had delayed the decision. 

Consumers are generally keeping calm and remaining optimistic about the future following the referendum result. The situation is changing rapidly and clearly it is just over 72 hours since the result but the “don’t panic” message seems to be getting through. That also seems to be having an impact on decisions to make major purchases with people deciding to wait and see.

Ian HughesChief executive, Consumer Intelligence

Wall Street down again on Brexit vote

Wall Street sign

Wall Street was down sharply again on Monday following last week's Brexit vote.

Major US stock indexes saw their biggest two-day percentage drop for 10 months. 

All three main indexes were down at least 1.5 percent in the wake of Thursday's referendum that has roiled global markets and led investors to seek safe-haven assets. 

The tech-heavy Nasdaq was the worst hit amid fears that fallout from the UK's decision could hit business investment spending in the technology sector. 

Along with tech, materials, energy and financials were the worst-performing sectors. 

"The momentum has continued downward because there continues to be a lot of uncertainty," said Eric Kuby, chief investment officer at North Star Investment Management in Chicago.

"It's important to note that it's orderly. It doesn't feel panic-inspired." 

At the close the the Dow Jones was at 17,140.24 - a fall of 1.50%. 

The Nasdaq was at 4,594.44 - that's down 2.41%.

And the S&P 500 closed down 1.81% at 2,000.54.

Tomorrow's front page today ...

BBC editor news mobile and online tweets

Now Fitch downgrades UK

Credit rating agency Fitch has joined S&P in downgrading the UK's credit rating. 

It has downgraded it to 'AA' - outlook negative - from AA+.

It said the UK's vote to leave European Union in the referendum on 23 June would have a negative impact on UK economy, public finances and political continuity.

It added that it believed that uncertainty following the referendum outcome would  induce an abrupt slowdown in short-term GDP growth. 

And it said medium-term growth to likely be weaker due to less favourable terms for exports to EU, lower immigration, reduction in foreign direct investment. 

'Bold reaction' needed from central banks

The uncertainty caused by Brexit is unlikely to die down in the short term said Francisco Torralba, senior economist for Morningstar’s Investment Management group. 

Politicians are likely to be wary of making comments about the Brexit timeline, but central banks could take action quickly if markets get too volatile. 

“Because both EU officials and British leadership are wary of making statements they might have to backpedal on, it’s unlikely they will clear up the uncertainty in the short term. 

"Any reassurance for the markets, I think, will come from a bold reaction by the Federal Reserve, the Bank of England, and the European Central Bank.”

Brexiteers have to accept 'bitter pill' of free movement of people

BBC World Service

European Central Bank
AFP/Getty Images

Germany's car makers have said the UK will have to accept the "bitter pill" of the free movement of people to ensure tariff-free access to the single market, saying "everything comes with a price".

In a surprisingly tough message from a key German export sector, Matthias Wissmann, the President of the VDA German Automotive Industry Association, told World Business Report on the BBC World Service: "If you want full access to the market, that comes necessarily with the free movement of people. That's the bitter pill the Brexiteers have to accept."

Mr Wissman - a former CDU politician - acknowledged there could therefore be a trade impact. "Unravelling Britain's relationship could be costly and could also be disruptive," he said. 

"If you want to be part of the single market you have to accept its conditions. If you want to have just free trade contracts, like with other countries in the world, you can find a different model but then the access would be more limited," he added.

"We don't like to build new barriers - but any bid to secure full access to the single market would necessarily come with conditions. Everyone who negotiates on the British side will understand that."

"Given the importance of exports for Britain to the European Union and of exports from the EU to Great Britain, some of the big emotions of the campaign have to be taken aside to get a clearer view of reality."

In response to the interview, the Conservative MP John Redwood told the BBC: "The contacts I've had over recent months have always stressed to me that Germany doesn't wish to impose new tariffs or other barriers in the way of our trade, and Germany in particular doesn't want the World Trade Organisation external tariffs on cars because that's one of the few which is quite a bit higher.” 

What a difference an 'A' makes ...

ITV political editor tweets ...

Michael Ryan

Ryanair's chief executive Michael O'Leary says that the airline will focus its growth on EU routes next year.

Read more

Poland: UK shouldn't be forced out of EU 'as soon as possible'

BBC World Service

Witold Waszczykowski, Poland's Foreign Minister

Poland's Foreign Minister, Witold Waszczykowski, says the European Commission had failed to give Britain a better offer to remain inside the European Union, reports BBC World Service.

Speaking after a meeting in Warsaw with nine EU foreign ministers, Mr Waszczykowski said Britain should not now be forced out of the EU as fast as possible. 

He said Poland would soon present Brussels with its proposals for EU reform to create a looser grouping of sovereign member states.  

European 'bank massacre'

Editorial Fellow at the Peterson Institute for International Economics tweets

Why did S&P downgrade the UK's credit rating?

Moritz Kraemer S&P's chief sovereign ratings officer has been speaking to Bloomberg TV.

The main reason(for the downgrade)  is our reassessment of the institutions and the predictability of the governance of the UK, he said. 

He added that a divided society- in terms of an age divide, a regional divide - would put continued stress on the UK. 

S&P would continue to watch the situtation in the UK, he said. 

What will the UK's credit rating downgrade mean?

Other things being equal, a downgrade can mean higher borrowing costs. But this time other things are not equal at all, writes BBC World Service economics correspondent Andrew Walker.  

Since the event which led to the downgrade – the referendum - those costs have gone down. The risk associated with UK government debt or bonds might in some sense be a little higher than before, but they are still seen as a safe investment compared with other assets.

In a situation where investors have become more reluctant to hold risky assets they buy safer ones including government bonds and that tends to lower the interest rate the government has to pay when it next goes to the market to borrow. 

And then there is the increased chance that the Bank of England will reduce its own interest rates because of concerns about the economic impact of Brexit. That tends to push government borrowing costs in the same direction.

Wall Street's losses deepen

The sell-off on Wall Street has deepened, with the Dow Jones now 1.4% lower, the S&P 500 1.7% down and the tech-heavy Nasdaq dropping over 2%.

Unless investors' mood improves in the next three hours, the falls will mark the Dow Jones and S&P's biggest two-day percentage drop for 10 months. 

"What I can say with certainty is uncertainty will remain," said Tina Byles Williams, chief executive officer of FIS Group. 

BreakingUK loses top credit rating from S&P

The UK has lost its AAA credit rating from S&P ratings.

S&P has downgraded the UK to AA and has a negative outlook.

The agency blamed the Brexit vote saying:

"This outcome  is a seminal event, and will lead to a less predictable, stable, and effective policy framework in the UK"

Brexit is 'history in the making'

BBC business presenter tweets

Union Jacks Oxford Street

An Institute of Directors survey suggests that a quarter of its members may freeze recruitment following the Brexit vote.

Read more

Frankfurt and Paris shares tumble

Traders at their desks in Frankfurt

Shares in London may have fallen sharply today, but the domino effect meant that in Frankfurt and Paris they were hit even harder as EU countries got to grips with what the Brexit vote means for them.

Germany's Dax was down 3.02% at 9,268.66.

And in France the CAC 40 lost 2.97% to end at 3,984.72.

Scotland holds talks with Gibraltar

BBC Middle East correspondent tweets

Storm hits FTSE 250

BBC economics editor tweets

'No change' for EU workers while UK still in EU

David Cameron on the future of UK's EU workers

Situation could get 'ugly'

Whatever bounce Osborne delivered, it’s gone now as markets are getting slammed again. Today’s US open shattered the peace. Wall Street opened sharply lower, with all 30 Dow stocks in the red. Cable has hit fresh 31-year lows, shedding 4% on the day. After Friday’s freefall it doesn’t sound much but these moves are massive in a historical context and it looks like nothing but down for sterling. The UK-focused FTSE 250 is one of the worst hit indices, dropping 6%. While the FTSE 100 is more sheltered from UK earnings, it too is suffering as the banks and house builders are sold hard. Fund managers were sitting on the side lines on Friday but are back in the game today and flexing their sell muscles. Political turmoil in Britain is roiling markets and there doesn’t seem to be an end in sight. For all that Osborne and Mark Carney have done to soothe market nerves, someone needs to take charge of this situation fast or it could get really ugly.

Joe RundleHead of trading, ETX Capital

Jeremy Corbyn's 'economic guru' has 'lost faith'

Economist tweets

FTSE 100 down 2.5%, FTSE 250 down 7%

Trader in London
AFP/Getty Images

It's been another day of big falls in London share trading, following Thursday vote to leave the EU.  

The FTSE 100 has closed down 2.55% at  5,982.20. 

The biggest faller in the FTSE100 was easyJet whose shares slumped by 22%.

Other big falls were seen by building firms Barratt Developments, down by 19% and Travis Perkins down by 17%.

Barclays - which lost more than 20% on Friday lost a further 17% today.

Trading in some shares was suspended during the course of the day because of the big falls. 

And BA owner - International Consolidated Airlines Group saw a 16% fall in its shares. 

The FTSE 250 - which mostly comprises companies that trade in the UK, and is regarded as being a better guide to the economy - dropped by 6.96% to end the day at 14,967.86.

City could be “damaged” by Brexit

Rating agency Fitch has said the victory by the “Leave” campaign could damage the Britain's status as a banking hub.

The agency also said most sectors would likely see less growth and lower investments due to the  uncertainty about future trade arrangements.

The UK's status as a major international banking hub could be damaged as some business lines shift to the EU. Higher import costs and pressure on exports due to the potential imposition of tariffs would be broadly negative for corporates.


Berlin senator says UK can't leave EU and still benefit from advantages

Cornelia Yzer

Berlin's Senator for Economic, Technology and Research, Cornelia Yzer, has told the BBC that Boris Johnson's plan for the UK to continue to benefit from the single market despite choosing to leave the EU 'will not work'.

"The British people made a decision, we will see what the consequences are - it will take some time," she said. 

"To make the decision to step out and to expect the advantages of the European Union, this will not work.

"To step out means some opportunities have gone.

"Nobody wants to block the British, but they made the decision to quit," she added.  

"[Boris Johnson] will have to explain to the British the burden he put on them by making the decision in favour of Brexit."

Investor pulls out of funding tech firm

BBC technology correspondent tweets

No immediate change for EU citizens in UK

The prime minister, David Cameron, has addressed the House of Commons for the first time since the UK voted to leave the EU in last Thursday's referendum. He told MPs that people's lives would be able to continue as they are.

We can reassure European citizens living here and Brits living in European countries that there will be no immediate changes in their circumstances. Neither will there be any initial change in the way our people can travel, in the way our goods can move or the way our services can be sold. The deal we negotiated at the European Council in February will not be discarded and a new negotiation to leave the EU will begin under a new Prime Minister.

New government unit will coordinate Brexit

David Cameron

The prime minister, David Cameron, has addressed the House of Commons for the first time since the UK voted to leave the EU in last Thursday's referendum. He told MPs that he was creating a new government unit to co-ordinate the strategy for leaving the European Union. He said it would be the most complex and most important task that the civil service has undertaken for decades:  

This will bring together officials and policy expertise from across the Cabinet Office, Treasury, Foreign Office and Business departments. Clearly this will be the most complex and most important task that the British Civil Service has undertaken in decades. So the new unit will sit at the heart of government and be led and staffed by the best and brightest from across our Civil Service.

David CameronPrime Minister

EEA the way forward?

Royal Institute of International Affairs tweets

SNP: will not see Scotland out of the EU

Angus Robertson, MP  tells the House of Commons that the SNP has no intention of seeing Scotland out of of the EU. 

If that means we have to have  an independence referendum then so be it. 

UK must not turn its back ...

BBC political editor tweets

No hesitation ...

BBC economics editor tweets

Brexit far from plain sailing

BBC economics editor

Prime Minister address Parliament on Brexit

BBC political editor tweets

How does Brexit affect your personal finances?

Bureau de change

Much has been said about what will happen to our finances as a result of leaving the EU, but there have been some striking examples of the immediate effect of the vote to leave.

Holiday money and retirement income are on that list. 

Other important aspects of our finances, such as taxes and savings protection remain unchanged.

BBC personal finance reporter Kevin Peachey has been taking a look at five changes to your finances following the vote to leave. Read more here

UK situation 'far more serious than is being recognised'

Financial Times Economics editor tweets

Soros did profit from Brexit