Sterling falls as surveys point to big Brexit hit

Sterling fell as reports suggesting that the UK’s manufacturing and services industries contracted in July heightened speculation that the Bank of England will cut interest rates as soon as next month.

Sterling dropped against all of its 16 major peers on the purchasing managers’ surveys, which were the first major economic data to give an insight into the fallout from the UK’s decision to leave the EU.

The Markit survey of purchasing managers — executives who make spending decisions at 1,250 big UK firms — fell by the most in its 20-year history. “July saw a dramatic deterioration in the economy,” said Chris Williamson, Markit’s chief economist.