British currency takes a pounding

LONDON — The British pound dropped sharply to a new 31-year low yesterday amid concerns that the country's decision to leave the European Union might cause a steep slide in U.K. commercial real estate values and hurt the wider economy.

Markets were jittery after three financial firms stopped trading in their respective U.K. commercial property funds after a rapid increase in investors trying to sell their holdings. The funds buy commercial property and offer shares to investors.

Some of those investors now appear worried that companies might opt to leave London to move operations to mainland Europe to retain access to the EU market. That would vacate office space and weigh down on real estate values in Britain's capital.

Aviva Investors, Standard Life and M&G Investments said they froze the funds to protect other investors who wished to remain in the funds. The moves come even as the Bank of England moved to reassure markets it would avoid a repeat of the 2007-08 financial crisis, freeing up more money for loans to business and households. Drawing another line under another dramatic day, a group of senior bank leaders — including the chairmen of Barclays, Royal Bank of Scotland and HSBC — met with Treasury chief George Osborne and promised to keep money flowing into the system.

Yesterday saw the pound fall another 1.7 percent.