Sterling at 31-year dollar low as Brexit angst grows

Sterling tumbled to its lowest level in three decades amid mounting concern the UK is heading for a so-called ‘hard Brexit’ that would restrict access to the EU’s single market.

The pound exceeded its lows versus the dollar set in the wake of the June 23 referendum and touched the weakest in three and a half years against the euro.

The slide extended as prime minister Theresa May was said to take the view that financial services would get no special favours in EU exit talks.

The pound has fallen against all 16 of its major peers since the premier’s weekend announcement that she’ll trigger the formal process for quitting by March.

The pound fell 0.7% to $1.2754 in later afternoon trading and touched $1.2720, the lowest since 1985.

It sank 0.8% to 87.97p per euro, after dropping to the weakest since February 2013. Options prices suggest further losses for the pound through year-end.

Sterling will end the year little changed at $1.28, according to the median estimate in a Bloomberg survey. Some see it going much lower, though, with four forecasters — including HSBC, Europe’s biggest bank — predicting a drop to $1.20.

The UK currency has already slumped 14% since the British people voted to quit the EU, and just completed its worst quarterly run of losses since 1984, with five straight declines.

Meanwhile, fresh data yesterday showed that the UK construction industry returned to growth in September as a measure of housing activity jumped the most since 2013.

A leading PMI jumped to 52.3 from 49.2 in August; the highest level in six months. It ended a three-month run of readings below 50.