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Sterling's Brexit freefall reaches lowest level against the dollar since 1985

Published 06/07/2016

Sterling has fallen to its lowest level since 2013 against the dollar
Sterling has fallen to its lowest level since 2013 against the dollar

Sterling continued its post-Brexit freefall by plummeting to a fresh 31-year low against the dollar as Asian markets opened on Wednesday.

The pound hit 1.2861 dollars, more than 15% below the levels seen on referendum day, in early trading.

Against the euro sterling fell 1% below Tuesday's closing figure to 1.1625, its lowest level since 2013.

The slide follows a sharp drop on Tuesday following poor performance figures for the UK's dominant service sector.

Measures by the Bank of England to help prop up the British economy, which include relaxing funding rules for banks to boost lending by up to £150 billion, failed to buoy the pound.

The pound's continued descent has been attributed in part to concerns that Brexit may cause a crash in British commercial property value and hurt the wider economy.

Angus Nicholson, a market analyst at IG in Melbourne, Australia, said: "Mark Carney, almost the only British leader who seems to not be resigning at the moment, emphasised the challenges the UK economy will suffer in the post-Brexit world.

"Carney's speech seems to have initiated the dawning of realisation of the longer-term impact of Brexit for many in the markets."

Asian stock markets slumped on Wednesday led by a near 3% fall in Tokyo.

The Nikkei 225 fell 2.8% to 15,239.23 and South Korea's Kospi lost 2.1% to 1,947.49. Hong Kong's Hang Seng index slid 2% to 20,331.33. Australia's S&P/ASX 200 was down 1.3% to 5,157.90. Stocks in mainland China, Taiwan and Thailand were also lower.

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