British pound falls to 31-year low, global markets flounder

The British pound fell to a 31-year low against the greenback after three property investment funds in the UK suspended withdrawals amid concerns about the impact of Brexit on financial markets.

The three funds account for about one third of the 35 billion pounds ($61 billion) invested in property funds in the UK.

Bank of England governor Mark Carney said some of the risks from Brexit had started to crystallise and the UK had "entered a period of uncertainty and significant economic adjustment."

The pound was buying around $US1.302.

Meanwhile, global markets were hit by a slowdown in the manufacturing and services industries in Europe.

In the US, the Dow Jones index fell almost 0.6 per cent or 109 points to 17,841.

The S&P 500 fell nearly 0.7 per cent or 14 points to 2,089.

The Nasdaq lost 0.8 per cent or 40 points to 4,823.

In Europe major markets were mostly weaker.

The FTSE 100 in London rose 0.4 per cent or 23 points to 6,545 after the Bank of England lowered the amount of capital that banks have to hold in reserve, freeing up 150 billion pounds for more lending.

There are predictions the UK central bank will cut interest rates by the end of next week.

The CAC 40 in Paris fell 1.7 per cent or 71 points to 4,163.

The DAX in Germany lost 1.8 per cent or 176 points to 9,533.

In futures trade, the ASX SPI 200 is down 0.4 per cent or 19 points to 5,167, indicating the local share market will open lower today.

In commodities trade, spot gold rose to $US1,356.46 an ounce, West Texas Crude oil is down $US2.39 to $US46.60 a barrel on worries about Brexit.

Meanwhile, the Australian dollar has fallen against the greenback overnight to around 74.6 US cents.

Against other major currencies its buying 75.8 Japanese yen, 57.2 British pence, 67.4 Euro cents, and $NZ1.043.