UK finance minister Kwarteng not resigning, no reversal in policy

British finance minister Kwasi Kwarteng is not resigning and there will be no reversal of policy, a Treasury source said on Wednesday, confirming an earlier report by Sky News political editor Beth Rigby.

Kwarteng's tax cut plans, on top of an energy bill bailout, all funded by a huge increase in government borrowing, have triggered financial market chaos.

The pound collapsed and world stock markets descended into pandemonium on Friday after Britain voted to leave the European Union, fuelling a wave of global uncertainty.

Sterling hit a 31-year low, crashing 10 percent to $1.3229 at one point, and the euro also plummeted against the US currency as the Brexit result caught markets by surprise.

European stock markets went into free fall at the opening, mirroring a rout in Asian markets, which were still open as the referendum results trickled in.

The London FTSE-100 index was down by around 5 percent in morning deals, having come off early lows after British Prime Minister David Cameron announced his resignation.

Banking stocks led the way down, with Royal Bank of Scotland, Barclays and Lloyds all losing close to a quarter of their market value at the opening.

"The British people have voted against the economic warnings of the overwhelming majority of expert economic opinion. Not surprisingly, this morning the referendum result has sent shock waves through global financial markets," said Daniel Vernazza, economist at UniCredit Research.

The Eurozone's main markets, Frankfurt and Paris, both fell more than 10 percent at one point, as financial stocks took the biggest hit.

In the weeks leading up to Thursday's historic vote, there had been widespread warnings that a "Brexit" would cause a rout across global markets that would wipe trillions off valuations.

(Reuters)