More detail from my colleague Sam Thielman in New York on the shock experienced by the US stock markets as the reverberations of Britain’s vote to leave the EU continue to echo.
Since the results became known on Thursday, the major US markets have suffered their biggest two-day fall in 10 months, Sam writes.
The Dow Jones Industrial Average finished the day down 260 points, or 1.5%, the S&P 500 dropped 1.8%, and the technology-heavy Nasdaq ended the day 2.5% down as the sell-off sparked by the Brexit vote in the UK continued to reverberate through the American market.
While many Americans have had trouble wrapping their heads around Brexit, the term is now dominating headlines in the US as it is in the UK and the impact of the vote has been affecting US assets. US government-issued bonds and gold both continued to climb: the online gold sales website BullionVault said it had liquidated a quarter-ton of gold since the vote went through.
Traders on the floor of the New York Stock Exchange on Monday Photograph: Andrew Gombert/EPA
Sam spoke to Ryan Sweet of the ratings agency Moody’s, who said that trouble would likely not do lasting damage to the US economy, though he did say equities “are likely going to have a rough few days.”
The situation with the UK’s national and local Young Labour societies is becoming more fraught. As many commenters have pointed out, the London Young Labour committee acted unilaterally in condemning Jeremy Corbyn in the statement they released earlier this evening.
The official position of the national Young Labour organization is that they still support the Labour leader, according to their Facebook account, where the latest statement - from Sunday - reads:
The one certainty is that we as the Young Labour National Committee have full confidence in Jeremy Corbyn to continue to lead the Labour Party through these uncertainties. We are reassured by his decades of integrity and service, when it is obvious that so many do not trust politicians.
Lauren Gilmour, the Scotland rep for the organization, sent the Guardian a statement which she said had been passed by a majority of the national Young Labour committee. The statement says that “The calls for Corbyn to go have been vastly over-exaggerated by a hostile media, and by a minority within our party. Antagonism to Corbyn is largely concentrated within the PLP, who do not compose the entirety of our movement.”
The statement hits out at London Young Labour, saying:
It is highly disappointing that the media has given an undue focus on fringe petitions and statements, whilst choosing not to cover the statements of representative bodies of the youth movement.
The LYL statement had not even been discussed on a committee level, in comparison to our statement which was.
What this indicates is that the media, far from representing debate across all wings of the party, has chosen to propagate a certain political position: Jeremy must go. The elected Young Labour National Committee must and should have all Labour mediums available to them to communicate the views of young members: that is the only way we can fulfil our duty to represent and fight for young members.
The bulk of the Labour youth movement is fully behind Jeremy Corbyn and is willing to fight to ensure that the democratic mandate he has been given is respected. Those who would spit in the face of the democratic will of ordinary members should be prepared to be faced with ordinary Labour members’ opposition to their brazen shenanigans.
But London is not the only local Young Labour organization to go rogue. In an email shared with the Guardian, Chiltern Young Labour emailed Corbyn’s office just after 8:30pm GMT imploring him to resign:
For the good of the party, for the good of the nation, for the good of the people it is time for you to step aside and allow wounds to heal. A party leader that cannot command the respect of the Parliamentarians is one who lacks leadership.
For the members of Chiltern Young Labour I implore you to do the honourable thing and resign now.
The decision to leave the EU continues to cause economic shockwaves
Here’s a quick round-up of what has happened.
Sterling has crashed in value, dropping to just $1.32, its lowest in more than 30 years.
The London stock market continued to plummet, losing 156 points on Monday.
The three main ratings agencies have all downgraded the UK’s credit rating. Moody’s was the first, cutting its outlook on UK sovereign debt from “stable” to “negative” on Friday afternoon. Fitch and Standard & Poor’s followed suit on Monday after the London stock exchange closed.
Stock markets in the US were hit hard too. The Dow Jones Industrial Average finished Monday down 260 points, or 1.5%, the S&P 500 dropped 1.8%, and the technology-heavy Nasdaq ended 2.5% down, their biggest two-day fall in 10 months.
Asian markets fared better, recovering some of the $2.1 trillion that was wiped from global markets Friday. Australia’s ASX200 closed up just under half a percent, while Japan’s Nikkei closed up 2.39 percent, recovering over a third of Friday’s 7.92 percent drop.
Fitch becomes the third ratings agency to downgrade UK credit
The agency just announced in a press release that it was downgrading the UK from an AA+ rating to an AA rating.
“The UK vote to leave the European Union in the referendum on 23 June will have a negative impact on the UK economy, public finances and political continuity,” the release said.
Fitch believes that uncertainty following the referendum outcome will induce an abrupt slowdown in short-term GDP growth, as businesses defer investment and consider changes to the legal and regulatory environment.
While recognising the uncertainty of the extent of the negative shock, Fitch has revised down its forecast for real GDP growth to 1.6% in 2016 (from 1.9%), 0.9% in 2017 and 0.9% in 2018 (both from 2.0% respectively), leaving the level of real GDP a cumulative 2.3% lower in 2018 than in its prior ‘Remain’ base case.
Part of the decision was that the EU referendum “makes a second referendum on Scottish independence more probable in the short to medium term,” the release said.
Politico has published an inside account of the PLP meeting this evening in which, they say, Corbyn “fought for his political life.”
In notes from an MP who was inside the meeting, they say that Alan Johnson MP said “I fought the [EU referendum] campaign and I take my responsibility, but you’ve got to take yours. Your office did not even turn up for the weekly meetings.”
Other MPs who took the floor in the meeting and told Corbyn he had to go, Politico says, include Margaret Hodge, Chris Bryant, Ian Murray, Helen Goodman, Ivan Lewis, Clive Efford and Bridget Phillipson.
Figures on Monday suggested a 57% increase in hate crimes and abuse.
Suspected racist graffiti was found on the front entrance of the Polish Social and Cultural Association (POSK) in Hammersmith early on Sunday morning, and the Metropolitan Police is reportedly on high alert.
“In the past few days we have seen despicable graffiti daubed on a Polish community centre, we’ve seen verbal abuse hurled against individuals because they are members of ethnic minorities,” David Cameron said earlier today.
“Let’s remember these people have come here and made a wonderful contribution to our country. We will not stand for hate crime or these kinds of attacks, they must be stamped out.”
A police source told the Guardian that it was “no coincidence” that the increase came off the back of the EU vote.
Jeremy Corbyn has lost the support of London Youth Labour, perhaps fairly unsurprisingly given the events of the last week.
In a statement posted to their website and signed by the group’s executive committee, the organisation says:
Not only did Jeremy Corbyn fail to deliver passionate Labour messages about staying in the EU, he also refused to work with Britain Stronger In Europe, despite polls showing this would turn out Labour votes.
Warnings were ignored, meetings cancelled and a desperately needed Labour message was lost.
This result will have effects on everyone, but especially the poorest in our society- for decades to come. These are the people we seek to protect as the Labour party, and we have failed – Jeremy Corbyn has failed.
It is for these reasons that we express no confidence in the Leader of the Labour Party, and hope London Labour MPs will consider young members’ views.
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