LONDON (AFP) - Britain's ruling Conservative Party was left reeling on Friday (July 1), after the shock withdrawal of favourite Boris Johnson from the race to become prime minister in the wake of the vote to leave the EU.
Interior Minister Theresa May is now leading five candidates vying to replace Prime Minister David Cameron, who announced his resignation after losing the referendum on Britain's membership of the 28-nation alliance.
May urged voters to stay in the European Union before the poll, but promised to respect their verdict if she took office. She has said she would not trigger the exit process until next year.
EU leaders have called for a swift divorce following last week's seismic vote, fearful of the impact of Britain's uncertain future on economic growth and the potential domino effect in eurosceptic member states.
Ratings agency Standard and Poor's cut the EU's credit rating by one notch on Thursday to AA, its third-highest level, saying it now considered "cohesion within the EU" was a "neutral rather than positive rating factor".
A spokesman for the International Monetary Fund said the uncertainty sparked by the British vote was "probably the biggest risk to the global economy".
The surprise decision by Johnson, long considered a favourite to succeed Cameron, to rule himself out has upended the Conservative leadership contest.
The former London mayor made his announcement after fellow Brexit campaigner Michael Gove effectively torpedoed his chances by announcing his own surprise bid for the top job.
A number of senior Conservatives subsequently lined up behind May, including the transport and defence ministers.
The mass-selling Daily Mail newspaper endorsed her candidacy on Friday with a front-page headline saying: "A party in flames and why it must be Theresa".
Cameron, who campaigned hard for Britain to stay in the EU, has said he will leave it to his successor to start formal exit talks.
In a speech on Thursday declaring her candidacy, May insisted that "Brexit means Brexit".
"The campaign was fought, the vote was held, turnout was high and the public gave their verdict," she added.
The outcome triggered anger among those who wanted to remain in the EU. More than four million people have signed a petition calling for a second referendum.
Gove, the intellectual face of the "Leave" campaign, has also said he would "not be dictated to on the timetable" and would only begin talks when it was "right for Britain".
The five leadership candidates will be whittled down to two by a series of ballots by Conservative MPs in the coming days before being put to a vote of party members.
The winner will be announced on Sept 9, and will become prime minister with no need for a new election.
The power struggle between Gove and Johnson brought comparisons to Shakespearean tragedies, with one MP likening Gove's actions to those of a murderous Macbeth.
But senior Conservative Michael Heseltine said Johnson was "like a general, that led his army to the sound of guns, and at the sight of the battlefield abandoned the field".
He accused the former mayor of generating "the greatest constitutional crisis of modern times".
After an 11-minute speech trumpeting his achievements and outlining his vision for Britain, Johnson left the punchline for the end.
"Having consulted colleagues and in view of the circumstances in parliament, I've concluded that person cannot be me," he told shocked supporters.
Observers were left stunned by the dizzying events in the corridors of power, where opposition Labour leader Jeremy Corbyn is clinging on to his job despite a mass revolt by his party's MPs.
The veteran socialist has been accused of not campaigning hard enough to stay in the EU, but insists he still has the support of party members.
As the political drama played out, Bank of England governor Mark Carney warned about "heightened uncertainty", noting the potential for increased unemployment and spillover to the global economy.
"One uncomfortable truth is that there are limits to what the Bank of England can do," he added.
He extended emergency liquidity loans for banks until September and hinted at possible interest rate cuts, sending the pound tumbling further against the euro.
Sterling also fell against the dollar, although it was up from the 31-year low it touched on Monday.
However, stocks in London, Paris and Frankfurt rallied for a third straight day, while Tokyo shares rose early Friday as worries over the economic impact of Brexit diminished.