Pound plunges to 31-year low against the dollar as markets mull May's Brexit speech

The pound has fallen to a 31-year low against the dollar as markets digest Prime Minister Theresa May's speech declaring that the UK will trigger Brexit negotiations by the end of March.

Sterling fell to $1.27.80 in early trading today (4 October), its lowest level against the US dollar since 1985. This level is almost 15% weaker than before the EU referendum on 23 June.

The move follows a turbulent day on the currency markets yesterday when traders looked to comments from the Conservative Party conference for more detail on what Brexit would look like.

The pound has also ploughed to a new three-year low against the euro, at 87.51p.

On Sunday, May said she would trigger Article 50 by the end of March 2017, which means the UK will leave the European Union by the summer of 2019.

Investors are concerned that Britain appears to be on track to leave the EU single market, as it places a priority on restricting immigration into the UK.

Director of research at Forex.com and City Index Kathleen Brooks said: "The Tory party conference is turning into a sell for the pound, as foreign exchange traders get spooked by May's apparent sanguine attitude to leaving the single market, preferring to focus on immigration and UK sovereignty rather than the economic fallout of Brexit."

The falls today take sterling below its previous post-Brexit-vote lows, with the UK's currency also down against 29 of its 31 major peers.

Spreadex financial analyst Connor Campbell said: "The pound's perilous position has continued this Tuesday, with sterling still suffering from the aftershock of Theresa May's hard Brexit promises."

By contrast, the FTSE 100 Index of the UK's leading blue-chip companies bounced over the 7,000 point mark at the start of trading, for the first time in 16 months as British stocks become a cheaper buy for foreign investors.