UK markets are bracing themselves for a sharp plunge ahead of the opening bell, after Britain voted to leave the European Union, causing the pound to hit a 31-year low. It was a 52% to 48% win for Brexit campaigners.

As the counting unfolded, the sterling plummeted as much as 10% early on Friday (24 June), and was on track for its worst one-day fall in history. News that Britain had voted to exit the 28-country bloc was immediately felt in Asia, where the Nikkei plunged 7.58%, suffering its biggest one-day loss since the Fukushima disaster in 2011. The slump prompted Japans finance minister, Taro Aso, to say he was very concerned about the world economy.

UK and European markets are expected to follow suit, with FTSE futures down as much as 10% ahead of the opening bell.

Analysts expect banking and financial stocks to be among the worst hit when the markets open.

Banking stocks are likely to be a particular concern given the weakness of the banking sector in Europe and the linkages between the UK and Europe, said Michael Hewson, chief market analyst at CMC Markets UK.

His concerns were echoed by Michael Van Dulken, head of research at Accendo Markets. Following a one-week rally on hopes that the campaign tide had turned back towards Remain, we expect the hardest hit stocks to be financials followed by housebuilders, with commodities related-names following close behind, he said.

UK banks are understood to have been in touch with the Bank of England throughout the night and the BoE Governor Mark Carney is expected to release a statement later today.

However, some economists have already warned that the UK could enter a recession following the vote, as was highlighted by the Remain movement in the months leading up to the referendum.

On the back of this mornings result we expect the UK will fall into a recession, said Piers Hillier, chief investment officer at Royal London Asset Management.

Unfortunately I see unstable market conditions lasting for between three and five years whilst new trade agreements are drawn up. It is our view that the UK government will be left with no choice but to stimulate the economy through fiscal and monetary means, flooding the system with liquidity if necessary.

Meanwhile, following the vote, market insight firm IHS has cut its GDP growth forecasts to 1.5% from 2.0% for 2016, and to 0.2% from 2.4% for 2017, while forecast for 2018 was trimmed to 1.3% from 2.3%.

Major economic and political uncertainty will be a fact of life for some considerable time, likely weighing down markedly on business and household confidence and behaviour, so dampening corporate investment, employment and consumer spending, said Howard Archer, chief UK and European economist at IHS.

Weaker asset markets and tighter credit conditions are seen further hampering UK growth, while the housing market could suffer a marked downturn.