The pound is getting smoked after the Bank of England's stark warning
The pound is tumbling again and has fallen to another 31-year low, after the Bank of England warned on Tuesday that "the current outlook for UK financial stability is challenging."
Sterling fell by 1% immediately after Britain's central bank said in its Financial Stability Report that the UK's referendum on EU membership remains "the most significant near-term domestic risks to financial stability."
It has continued to fall since the release, and just before 2:00 p.m. BST (9:00 a.m. ET) is lower by 1.6% to $1.3077, another fresh low.
Investing.com
Sterling has now stretched well below the previous low of $1.3151 against the US dollar it hit in London’s early trade — its lowest level since September 1985. It is now substantially below the level it reached in the hours after the result of the British referendum on the European Union.
Growth in the eurozone is at its weakest level in nearly two years— and it is mainly Britain's fault, according to the latest PMI data released by Markit on Tuesday morning.
Markit's PMI reading for June showed that the continent's composite data — a mix of both services and manufacturing — hit 53.1 in June, up from the flash estimate, but flat from May's reading, a sign that things in the eurozone are struggling to pick up.
Britain's industry suffered its worst quarter in more than three years after the reading came in at 52.3 for June from 53.5 the previous month.
Data yesterday showed the British construction industry turned in its worst performance since 2009. The Markit / CIPS construction PMI survey turned in a reading of 46.0, when a print just above 50 was expected. Like all PMI surveys, a reading above 50 indicates a sector in expansion, while a number below that level indicates contraction, so the miss was severe.
There has also been market chatter about the impact of Standard Life’s announcement that it is shutting down client withdrawals from its UK property fund.
Read the original article on Business Insider Australia. Copyright 2016. Follow Business Insider Australia on Twitter.
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