Shares slide as Brexit fears take hold

UK and European stock markets fell and the pound hit a fresh 31-year low as worries over the UK's vote to leave the EU continue to rattle markets.

The UK's FTSE 100 share index closed 1.3% lower. US shares initially followed suit but closed higher.

Earlier, the pound fell to $1.2798, its lowest since 1985, before rebounding.

Analysts blamed warnings from the Bank of England that Brexit risks were "crystallising" and fears about the UK commercial property market.

In late trade, the pound was at about $1.29. Sterling has dropped by about 14% against the dollar since hitting $1.50 ahead of the referendum result.

Against the euro, the pound was down 0.9% at €1.1656, having earlier hit its lowest level since 2013.

"Pessimistic predictions for sterling are coming true," said Andrew Edwards, chief executive of ETX Capital. "The pound is the chief proxy for the post-Brexit mood in the markets."

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