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Pound slides to fresh 31-year low against the dollar | Pound slides to fresh 31-year low against the dollar |
(about 2 hours later) | |
The pound has hit a fresh 31-year low against the dollar as markets remain edgy in the wake of the Brexit vote. | The pound has hit a fresh 31-year low against the dollar as markets remain edgy in the wake of the Brexit vote. |
At one point it hit $1.3058 against the dollar, the lowest level since September 1985. Against the euro it fell to €1.1703, its lowest since 2013. | At one point it hit $1.3058 against the dollar, the lowest level since September 1985. Against the euro it fell to €1.1703, its lowest since 2013. |
Analysts blamed a disappointing report on the UK services sector, and ongoing uncertainty about the effects of the UK's vote to leave the European Union. | Analysts blamed a disappointing report on the UK services sector, and ongoing uncertainty about the effects of the UK's vote to leave the European Union. |
There was caution on Wall Street as well, where shares opened lower. | There was caution on Wall Street as well, where shares opened lower. |
In London, shares in property firms and asset managers dropped sharply after insurance giant Aviva become the second firm in two days to suspend trading in a UK property fund following the Brexit vote. | In London, shares in property firms and asset managers dropped sharply after insurance giant Aviva become the second firm in two days to suspend trading in a UK property fund following the Brexit vote. |
Aviva said the freeze would take place immediately due to "extraordinary market circumstances". | Aviva said the freeze would take place immediately due to "extraordinary market circumstances". |
On Monday, Standard Life Investments suspended trading in its UK property fund. | On Monday, Standard Life Investments suspended trading in its UK property fund. |
Mark Priest from ETX Capital said: "Investors are getting very nervous now... the last time we saw this kind of action was in the financial crisis. | Mark Priest from ETX Capital said: "Investors are getting very nervous now... the last time we saw this kind of action was in the financial crisis. |
"Fears about the investment industry are leaching into the forex markets today, with sterling seeing heavy selling again after a few days of relative calm after the Brexit vote collapse." | "Fears about the investment industry are leaching into the forex markets today, with sterling seeing heavy selling again after a few days of relative calm after the Brexit vote collapse." |
Property gloom | Property gloom |
The FTSE 100 index was lower for most of the morning, but then gained ground after the Bank of England announced new measures to try to support the economy. | The FTSE 100 index was lower for most of the morning, but then gained ground after the Bank of England announced new measures to try to support the economy. |
The Bank of England has eased special capital requirements for banks, potentially freeing up £150bn for lending. | The Bank of England has eased special capital requirements for banks, potentially freeing up £150bn for lending. |
The FTSE 100 closed 23.11 points, or 0.4%, higher at 6,545.37. The FTSE 250 - which contains more UK-focused companies - was also off its lows for the day, but still closed 382 points or 2.4% lower at 15,734.68. | |
Among property shares, housebuilder Persimmon fell 7.2% despite it reporting a rise in half-year revenues. | |
The company said it was "confident" about its prospects, and that it was too early to say how the UK's vote to leave the EU would affect the sector. | The company said it was "confident" about its prospects, and that it was too early to say how the UK's vote to leave the EU would affect the sector. |
But the news from Standard Life Investments, followed by Aviva, cast a shadow across the entire property sector. Shares in Barratt Developments fell 9.8% while Berkeley Group closed 6.4% lower. | |
Standard Life Investments said the number of investors asking to withdraw their money had increased following the EU referendum vote. | Standard Life Investments said the number of investors asking to withdraw their money had increased following the EU referendum vote. |
"The suspension was requested to protect the interests of all investors in the fund," it said in a statement. | "The suspension was requested to protect the interests of all investors in the fund," it said in a statement. |
The £2.9bn fund invests in a mixture of commercial real estate in the UK, including office blocks, shopping centres and warehouses. | The £2.9bn fund invests in a mixture of commercial real estate in the UK, including office blocks, shopping centres and warehouses. |