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NZ to work with UK on what happens next

NZ NewswireNZ Newswire 24/06/2016

New Zealand respects the UK's decision to leave the European Union and will take time to work through the implications.

That's the line from Prime Minister John Key via a spokesperson after the UK voted to leave the EU in a referendum on Thursday.

Sterling has fallen to its lowest level since 1985, share markets have tumbled and gold has risen because of uncertainty about what happens next.

"This was always a decision for voters in the UK and we respect the decision they have made," Mr Key said.

New Zealand will continue to have a strong relationship with the EU and the UK, and remains committed to the launch of formal negotiations on a free trade agreement with the EU.

"In terms of our existing trade arrangements, the immediate effects of the leave vote on New Zealand are likely to be limited and we expect that trade and other business activities will continue smoothly in the interim," Mr Key said.

Federated Farmers is urging New Zealand to be first in seeking a new trade relationship with the UK, but Mr Key says New Zealand will work with the UK as it goes through the process of leaving the EU to put in place new trading arrangements.

New Zealand First leader Winston Peters says the vote is a wake-up call for democracies everywhere.

"I joined the 'Leave' campaign at the 'Leave' campaign's request and I am delighted the British people exhibited the same character they showed when they confronted Hitler," Mr Peters said.

The trigger point that focused so many voters was the effect of mass immigration on their country, and their own economic and social futures, he said.

Simon Walker, a former NZ journalist who is the director-general of the Institute of Directors in the UK, told Radio NZ everyone was very surprised by the result.

"I can't see how (UK Prime Minister) David Cameron can last now or (Chancellor of the Exchequer) George Osborne," he said.

He says markets will react further.

"There's no question it's a horrible blow for the British economy and it's going to take along time to work through it," he said.

Australian Prime Minister Malcolm Turnbull expects the British exit from the EU will have an initial "shock" and create uncertainty, but stability will return soon.

Treasurer Scott Morrison, who was briefed by Treasury and Finance officials, told reporters Australia's exposure was "very limited".

The key issues were immigration, national sovereignty and how it might affect labour markets and the cost of investment in the UK, he said.

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