Wednesday 6 July 2016 5:00 pm

At the close: Markets enter reverse as Brexit strains stack up

Sterling has been savaged today, the FTSE 100 has crashed and half of all assets in UK property funds have been frozen in a difficult day on the financial markets.

The pound dropped down below $1.28 overnight, recovered briefly, but is now on the slide after a number of analysts published decidedly bearish forecasts.

A single pound coin will now fetch you $1.2954 on the money markets, down 0.5 per cent, though both Goldman Sachs and Deutsche Bank do not think such value will be around for long.

The US investment bank reckons it'll hit $1.20, while the Germans landed an even harder blow on people who like their reserve currencies to be stable and British saying it'll drop to $1.15 before long.

George Saravelos, the Deutsche Bank analyst notorious for his pessimism on the pound, said in a note today: "There is much more to go before sterling is considered excessively 'cheap'. Even a move down to $1.10 and €1.03 would only take sterling to … valuation extremes that have not been uncommon in the past."

Even the bookies have got involved – a sure sign that something strange or noteworthy is going on in the financial world. Betway today offered odds implying there was a 60 per cent chance of sterling slumping below $1.20 before the end of the year.

The FTSE 100, which has hitherto moved in the opposite direction to sterling, also plunged by 1.3 per cent to close at 6,463.59. Typically, it was domestic stocks which led the index lower.

Tesco and Morrisons both took a hammering, closing down eight and 7.2 per cent respectively. The big banks weren't far behind, Lloyds shaved 6.8 per cent, and the Royal Bank of Scotland (RBS) lost six per cent.

It was an even darker day for UK real estate as well as a string of property funds suspended trading for fear of mass outflows. The doors are now locked to around half of all cash tied up in them.