“The British pound is down sharply, following the Bank of England’s latest policy move and amid concerns that the nation’s exit from the European Union will hurt property prices as three funds moved to halt withdrawals.”
Foreign investors are looking to withdraw their invested funds from commercial property trusts in the UK. Three large trusts have halted payments to investors. If the funds continue to pay out they will need to sell the underlying assets to meet demand. How long can they stall on this? They have a meeting with the Bank of England to discuss.
If the assets need to be sold then the full impact of the forecast currency loss, from current US1.30 to US1.20 will be experienced. An investment strategy, with the Brexit vote so close, would have suggested the funds be withdrawn in the face of impending uncertainty before the vote, rather than after when everyone can see the risks. Make sure you have an investment strategy so you know what action to take in the face of uncertainty.
The layers of the impact of the Brexit vote will continue for several years as the UK untangles itself from the formal EU relationship and seeks to implement similar policies from the outside.