Sterling hits new 31-year low against US dollar

The pound sank to a fresh 31-year low against the dollar on Wednesday amid growing signs that the shock Brexit vote is already damaging the UK economy.

Sterling hit a low of $1.2796 at one point as investors lost confidence in Britain’s future outside the European Union and piled out of the UK currency, The Guardian reported. 

The last time the pound was lower was in June 1985, but it has still got a way to fall before hitting its all time low against the dollar of $1.0520, struck on 1 March 1985.

Sterling has plunged almost 15% since a poll published on 23 June – the day of the referendum – wrongly indicated Britain had voted to stay in the EU, pushing the UK currency above $1.50. The pound also fell to a near three-year low against the euro at €1.1741.

On the stock market, there were fresh falls for housebuilders, which have been hard hit since the referendum result, and the suspension of three major commercial property funds. M&G Investments and Aviva Investors barred investors from withdrawing cash from their property funds on Tuesday amid fears of a crash in the commercial property market and Standard Life made the same move a day earlier.

In early trading on Wednesday Barratt Developments was leading the FTSE 100 fallers, down by over 5%, while Taylor Wimpey fell 4%. The FTSE 100 was up 0.3%, at 6563, but the more UK-focused FTSE 250 index was down again, falling 0.5% to 15660.

Sterling’s slide came amid worrying signs the UK economy is already suffering from the Brexit vote.