Market reaction to Britain's leave vote: it could have been worse

Do not read too much into the City's initial response, divorce negotiations with the EU are now the main event

The FTSE 100 index is down about 300 points, or 4.5%, at 10am. Sterling is 7% weaker against the dollar. And 10-year gilt yields have fallen from 1.3% to close to 1%, the biggest one-day drop since 2009. These are big moves but - versus expectations - you'd call it a par score. Share prices and the pound had rallied strongly in the days before on the expectation of a vote for remain. A victory for leave - a 10% chance, according to the bookmakers, as the polls closed - couldn't fail to provoke a strong market reaction.

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