The pound plunged to a new 31-year low against the dollar and to the lowest level in over two years against the euro on Tuesday (5 July), amid disappointing economic data and post-Brexit uncertainty.

The sterling slid 1.29% to $1.3116, hitting its lowest level against the greenback since 1985 and hit a two-and-a-half year low of 84.73p against the euro, before edging back to 84.98p per €1.

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The decline came on the back of a fresh bout of post-Brexit pessimism among UK businesses. A survey released overnight by YouGov and the Centre for Economics and Business Research (CEBR) showed the number of businesses feeling pessimistic about the economic outlook over the next 12 months jumped from 25% before the vote to 49% in the week following the referendum.

Meanwhile, the Bank of England said it would postpone demands for £5.7bn in extra financing to be held by commercial banks' balance sheets – known as the 'countercyclical capital buffer' – in light of the economic uncertainty triggered by the Brexit vote last month.

Furthermore, the UK central bank said would reduce the level of the buffer – pencilled in for 2017 – from the planned 0.5% of a banks' lending exposure to 0%.

"Carney reiterated that the Bank has a wide range of tools if further easing is needed, but declined to offer any indication as to when the Bank might act," said Danny Cox, analyst at Hargreaves Lansdown.

"The increasingly poor picture surrounding the UK's economy makes next week's Monetary Policy Committee meeting all the more important. Sterling is likely to remain subject to volatility until we have a clear picture of the central banks' monetary policy path."

News that Standard Life Investments UK suspended trading in its £2.9bn real estate fund following a rise in withdrawal requests by investors, triggered by the country's decision to leave the EU did little to lift the mood.

Elsewhere, the yen climbed to 101.76 per dollar, extending its gains to 4% since the UK voted to leave the EU, as investors flee for safe havens. Meanwhile the greenback also gained ground against the euro, trading at €0.8972 per $1.