The British pound tumbled to a-31-year low against the dollar, the weakest level in three decades. Analysts said there was room for further falls as too much uncertainties after Britain’s vote to leave the European Union.
Sterling fell as much as 1.9 percent to $1.3031, the lowest level since 1985. It has already dropped 12 percent after the referendum in June 23.
The pound also dropped to its lowest against the euro since 2013. Sterling was trading at 85.48 pence per euro.
Investors focused on the U.K. again as the Bank of England warned that outlook for stability of the financial system had become “challenging” after the Brexit vote.Bank of England Governor Mark Carney outlined more tools to contain the fallout after the referendum. He also said that the weaker currency should help exporters.
Investors show their concerns about the economic and financial fallout in the U.K. by suspending their money in real-estate. Aviva Investors suspended its U.K. Property Trust, citing “extraordinary market circumstances.” On Tuesday, M&G Investments suspended a 4.4 billion-pound real-estate fund. A day earlier, Standard Life Investment suspended its 2.9 billion-pound U.K. real estate fund.
“The last time we saw this kind of action was in the financial crisis,” said Mark Priest, head of index and equity market making at ETX Capital.
Many analysts had changed their forecast and expect the pound will end up below $1.30 at the end of year.
“I do believe the U.K. will revert to the kind of economy it was before it was a member of the EU—a country prone to balance of payments crises,” said Marie Owens Thomsen, chief economist at Indosuez Wealth Management.