Pound, UK stocks continue to sink in post-Brexit vote turmoil

European stocks extended their losses on Monday with the British pound falling further, after its Friday record one-day decline caused by the UK’s historic vote to leave the European Union.

The sterling dropped more than 3 percent to $1.32 against the US dollar as of 10:15 GMT. The euro is also under pressure, down almost one percent against the greenback.

"We are still looking for another 10 percent fall for the pound against the dollar in the coming months as data confirms the economic slowdown and monetary policy expectations increase," said Jeremy Cook, chief economist at World First, as cited by the BBC.

Banking, airline and property shares plunged Monday on the London Stock Exchange.

Barclays shares were temporarily suspended after falling more than 10 percent, Royal Bank of Scotland fell nearly nine percent, while shares of airline EasyJet plummeted 16 percent.

London’s FTSE 100 index was down 1.31 percent, while the FTSE 250 index, which is mostly made up of UK-focused companies, fell 2.2 percent. The German DAX slid 1.49 percent and the French CAC 40 index more than one percent in early trading.

Following Friday's eight percent fall, Japan's Nikkei closed 2.4 percent higher on Monday backed by warnings from Japanese officials they may intervene in the currency markets to stabilize the yen.

Demand for safe haven assets such as gold remains strong. The price of the precious metal rose half a percent on Monday to $1,330 per troy ounce.

Moody’s rating agency has cut UK’s credit outlook to negative, saying the referendum result would herald "a prolonged period of uncertainty".

"In Moody's view, the negative effect from lower economic growth will outweigh the fiscal savings from the UK no longer having to contribute to the EU budget," said the rating agency. It added the UK had one of the largest budget deficits among advanced economies.

Standard and Poor's has also threatened to downgrade the UK’s rating. (RT)