The pound dropped below $1.35 for the first time since 1985. The currency fell as much as 11% and was on course for its biggest one-day fall ever. It was down against all major world currencies.
The U.K. is first country to vote to leave the European Union. Prime Minister David Cameron resigned Friday, saying he would hand over to a new leader in about three months.
Stocks markets around the world are also falling sharply after the campaign to leave the EU won Thursday’s referendum.
“It is vile and ugly out there, the British pound is facing its worst day ever,” said Naeem Aslam, chief market analyst at ThinkForex.
Economists have been warning for months that if the U.K. referendum resulted in a vote for a British exit (Brexit) from the EU, that would do lasting damage to the British economy.
As the market fell, the Bank of England said it will take all necessary steps to meet its responsibilities for monetary and financial stability.
“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,” it said in a statement.