Market mayhem may well affect the real economy and real people

The pound has fallen significantly against both the dollar and the Euro. Credit: Reuters /Luke MacGregor/File Photo

As I write HSBC's share price in Hong Kong is down 11% - an indication of the sort of rough treatment Barclays, Lloyds and RBS can expect when they start trading in London.

The pound has fallen significantly against both the dollar and the Euro.

The result is official, it isn't the one the financial markets were expecting and the result is mayhem.

As soon as it became clear that Britain had decided to leave the EU the prices of currencies, companies and commodities swung wildly.

These gyrations were flagged well in advance and dismissed by the Leave campaign as 'Project Fear'.

Much depends on where prices settle. In the short term it is unlikely to have an immediately disastrous effect on the British economy or how things operate.

But if the fall in the pound in particular, proves persistent, then the price of greater political independence is likely to be a significant squeeze on our living standards.

As a nation, we import more than we export and are therefore particularly more exposed to a fall in the buying power of the pound.

A sustained devaluation of 10% against the dollar and 7% against the Euro will lead to price rises.

The impact will be felt at the petrol pumps quite quickly (oil is priced in dollars) and more widely (the form of food bills and so on) in the months that follow.

The rise in inflation creates another potential headache.

Consumers will find they have less money to spend and economic growth may well slow as a result.

Unemployment is likely to rise and Boris Johnson could end up apologising for a recession he haS promised voters won't happen.

We're entering a period of intense political uncertainty. For as long as it takes for Britain to renegotiate trade terms with the EU and the rest of the world in particular there is likely to be a wariness about investing here.

Our biggest banks have been stress tested by the Bank of England and declared robust, but the fall in sterling raises questions about how exposed they are to a slowdown.