Pound continues post-Brexit slide

Sterling has continued its post-referendum slide against the euro, briefly dipping below €1.17 yesterday - its lowest level since 2013.

The currency has held steady in early trading this morning, but remains down on pre-Brexit vote levels, when it was trading at more than €1.30.

The fall in the value of sterling is bad news for British retirees living in France, whose pensions are set to be worth noticeably less - at least in the short term - though the pound has yet to hit the historic lows of the 2008 financial crisis.

It also has the tourist industry in France concerned, as a €1,000 holiday will cost Britons about £80 more than it would have done before the vote.

Those sending money to the UK or planning a trip there will, however, find that the euro in their pocket is worth much more than before the referendum. Today, the Post Office, the largest foreign currency trader on the British high street is offering €1.14 to the pound.

And anyone living here who is close to completing a house purchase in the UK.

Some experts had already warned that the two currencies could reach parity within 12 months. David Meier, an economist at Swiss private banking group Julius Baer, said in a widely reported research note in the days immediately after the vote that the euro could rise to £0.93 over the next three months, adding that he would 'not be surprised' to see parity this time next year.

According to one measure, the drop in the value of sterling means that France has overtaken the UK to become the world's fifth largest economy for the first time since 2014. Using Wednesday's rate of €1.1656 to calculate the GDP of the two countries, France's GDP is €2.182trillion compared to Britain’s €2.172trillion euros, according to Reuters.

The pound is performing badly against most currencies. Yesterday, it fell to its lowest value against the US dollar since 1985, and many experts expect it to drop further.

Meanwhile, analysts see the Bank of England's announcement that it would lower banks' capital requirements for lending in the wake of the referendum vote as a precursor to further monetary easing, which is likely to drive sterling lower.