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Aviva suspends trading in £1.8bn property fund after Brexit

Aviva has suspended trading in its £1.8 billion property fund as investors scramble to pull their money out of UK commercial property holdings following the Brexit vote.

The move follows Standard Life Investments, which made the same move on Monday, halting dealings in its £2.7 billion UK property fund.

Over recent months we have been experiencing higher than usual volumes of requests to sell units in the trust, and this, coupled with challenging market conditions in light of investor sentiment regarding the EU referendum, has reduced the amount of cash held by the trust.

As it takes a considerable time to sell properties, we have had to suspend dealing until the amount of cash held in the trust increases.

– A spokesperson for Aviva Investors Property Trust

The suspension means that investors are now restricted from buying or selling shares in the fund.

Aviva said it is acting in the interests of all investors, adding that it was unable to give a timeframe for when the suspension would be lifted.

It's probably only a matter of time before we see other funds follow suit. The problem these funds face is that it takes time to sell commercial property to meet withdrawals, and the cash buffers built up by the managers have been eroded by investors heading for the door, both in the run-up to the EU referendum, and in the aftermath.

– Laith Khalaf, senior analyst at Hargreaves Lansdown


Pound plunges as sterling feels heat of Brexit vote

The pound fell against the dollar and the euro on Monday morning. Credit: PA

The value of the pound continued to plunge on Monday morning as concerns over the state of the British economy deepened following Brexit.

The pound fell 3.35% against the dollar to $1.32, following on from Friday's 10% drop. Against the euro the pound was also down, falling 2.27% to €1.20.

It comes as George Osborne sought to calm market fears in an early morning speech on Monday, in which he said the UK economy is "open for business" and "about as strong as it could be".

Ken Odeluga, market analyst at City Index, said: "Osborne was of course not yet able to provide any further material certainty on key procedural questions (particularly when Article 50 will be triggered) facing Britain, and consequently its markets, over the next several months.

"It is uncertainty surrounding such questions that are contributing to sterling's softness."


Boris Johnson: 'Project Fear is over'

Boris Johnson said "Project Fear is over" after the Chancellor George Osborne said an emergency budget was unlikely to happen until David Cameron's successor takes over in the autumn.

The leading Leave campaigner welcomed Mr Osborne's statement on Monday morning that the UK economy was "about as strong as it could be", as the chancellor tried to calm fears in the markets about the economy post Brexit.

"It is clear now that Project Fear is over, there is not going to be an emergency budget, people's pensions are safe, the pound is stable, the markets are stable, I think that's all very good," Mr Johnson told reporters as he left his London home.

The former Mayor of London also said EU citizens currently living in the UK and British expats living on the continent "have their rights protected", as he sought to clear up "confusion" over their "status".

FTSE 100 down as bank shares plunge

The FTSE-100 index was down 60.01 points to 6078.68 at 9.15am, as RBS, Barclays and Lloyds suffered falls in their share value.

ITV News Business Editor Joel Hills has the latest:

The FTSE 100 top fallers as at 10.20am Credit: FTSE

Joe Trundle, Head of Trading at ETX Capital, said: "Banks are being hammered as a result of Britain’s decision to leave the EU. Aside from the general investor uncertainty, there are some important reasons why financial stocks are so exposed.

"First, there is a realisation that interest rates will remain low for longer – gilts have sunk below 1% for their first time ever today. This is not confined to the UK - Australia’s central bank may have to cut rates because of the vote.

"Second, property assets will have to be revalued and that could severely dent banks’ loan books.

"Thirdly, British banks probably won’t have access to EU markets post-Brexit as they’ll lose their 'passporting' privileges.

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