THE pound fell dramatically against the dollar as early results pointed to a better-than-expected result for the Leave camp.
Sterling fell further than on Black Wednesday after a narrow Remain vote in Newcastle.
It slumped further - to $1.43 - after a strong Leave vote in Sunderland.
Shadow Chancellor John McDonell said the Bank of England would have to act to prevent even more serious turbulence in the event of a vote to leave the EU.
He told BBC News: "That is exactly the sort of shock we were expecting so I would expect the Bank of England to intervene in the morning.
"Chancellors and shadow chancellors can't comment on sterling but what we can do is have a mature approach to this and say whatever the outcome, we will negotiate the best deal we possibly can with regard to our trading partners in Europe and in that way we might give some assurances to the market."
The pound stabilised slightly following the Sunderland result but then tumbled further to trade below $1.41.
Earlier, as the polls closed, it had risen to $1.50 after Ukip leader Nigel Farage said it looked as though Remain had "edged" the vote.
Joe Rundle, head of trading at ETX Capital, said: "It was a huge swing for the pound - something we virtually never see. The move was bigger than the pound dropped on Black Wednesday.
"Nervousness is palpable in the markets as there is the potential that assets have been wildly mispriced.
"Investors were a little too complacent and if we do see a vote out we will see moves well beyond this."
Jeremy Cook, chief economist at World First, said: "These moves are concerning and bring back pretty painful memories of 2008.
"The pound didn't have this bad a day [against the dollar] in the global financial crisis and the moves by the bookies to price Leave as the favourite is killing the pound."
The price of gold, seen as a safe haven for investors, rose as the value of the pound fell.
The pound fell by 4.1 per cent on Black Wednesday when Britain was forced out of the European Exchange Rate Mechanism in 1992.
The betting exchanges also reflected a new nervousness about the outcome of the referendum.
Remain had 94 per cent chance of victory according to trading on Betfair just before the polls closed at 10pm.
But the odds plummeted to 65 per cent (8/15) as the results poured in, with Brexit on 35 per cent (9/5).
By 2am, Leave was the favourite on some exchanges.
A staggering £82million has been wagered on the outcome of the referendum on Betfair, making it the biggest political betting market in the exchange's history.
On polling day alone, £32million was traded.
Betfair Spokesperson, Naomi Totten said: "The market has had a dramatic few hours since polls closed.
Earlier in the day, the money markets, bookmakers and betting exchanges all reflected greater confidence in a Remain vote than the pollsters' neck-and-neck findings.
On polling day, William Hill offered odds of 1/8 on Remain and made Leave a long-shot at 5/1.
The pound also traded strongly against the dollar throughout the day on hopes of a Remain vote.
Last week, it fell as low as $1.40 as traders tracked polls suggesting a flagging Remain campaign.
But from June 17, when the campaign was halted after the killing of MP Jo Cox, it rallied strongly, returning to $1.48, the level it was trading at a month ago.
The delay halted the momentum that was being built up by the Leave campaign.
As the nation mourned Remain activist Ms Cox, the public mood also appeared to harden against the harsh tone of the Leave campaign's anti-immigration warnings.
On the final Sunday before polling, as campaigning resumed, leading figures in the Remain campaign were united in condemning Ukip leader Nigel Farage's 'Breaking Point' poster, describing it as 'vile,' 'disgraceful,' and 'racist'.
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