Financial markets have been rocked this morning after the UK voted to leave the European Union, pushing the FTSE 100 down 7 per cent in early trading - its largest one-day fall since 2008.
Sterling has also plummeted to $1.37, down more than 8 per cent this morning as markets try to make sense of the outcome.
Investors now not only have to make sense of the implications of the country leaving the EU but also of the imminent political instabilty given the fact David Cameron will step down in October.
Azad Zangana, senior European economist at Schroders, said on a conference call this morning that the decision would likely lead to a "significant delay or even cancellation of investment projects in the UK", something he had seen evidence of up to six months ago as focus on the referendum intensified.
"The UK benefits disproportionately from [foreign] direct investment so it will be a bigger shock than most people anticipate."
He added the risk of recession was now at 35-40 per cent, which he described as "very elevated indeed".
Piers Hillier, chief investment officer at Royal London Asset Management, said: "On the back of this morning’s result we expect the UK will fall into a recession.
"Unfortunately, I see unstable market conditions lasting for between three and five years whilst new trade agreements are drawn up."
Arif Husain, head of international fixed income at T Rowe Price, said the decision by the UK to leave the EU would have a global impact.
"People forget the impact that Greece had – and Greece is much smaller than the UK, and not a financial centre," he said. “The vote to leave could result in a global recession - the chances of this have risen above 50 per cent."
Toby Nangle, head of multi-asset allocation EMEA at Columbia Threadneedle, said he foresaw a "hit to UK growth in the short as well as medium-term" and that the slowdown in the UK could hit the "nascent economic recovery seen across the continent".
"But valuations will be hit hardest by the profound uncertainty as to the prospects of political contagion rather than any immediate impact to company bottom lines," he added.
A host of commentators have highlighted larger companies, which have a large proportion of earnings coming from outside the UK, could benefit, as a weaker pound will be beneficial when foreign currency profits are translated back to sterling.
The prognosis is being viewed as worse for smaller companies though, which often derive a larger proportion of earnings domestically. However, some commentators point to the fact lower levels of liquidity in smaller stocks could amplify stock price movements and thus potentially create opportunities.
Paras Anand, head of European equities at Fidelity, said the pan-European corporate sector was "truly international in nature" and had a greater global presence than the US or Asian corporate sectors.
"The Pan European corporate sector is much more broadly based," he said.
"So even in a scenario which the vote to leave has a negative impact on demand in the UK and Europe to a greater extent than we currently believe, it will not at the aggregate level dominate the prospects for companies as much as some might believe.”
Read all our Brexit reaction:
Chris Dillow - Equities after Brexit
Carney talks up capital levels
Consumer confidence could see 'significant swings'
Property and housebuilders and that silver lining
Bad news for the nation's scientists
