Tuesday 01 November 2016 9:10 am

The run on the pound hasn’t finished yet and will fall further when the PM triggers Article 50

Sterling will lose a further five per cent of its value against the dollar when Prime Minister Theresa May formally pushes the button to leave the EU.

A poll of analysts revealed that the pound will most likely drop to $1.15 when May triggers Article 50, but Britain's currency will keep its nose above parity against the euro.

The pound's pounding since the Brexit vote has seen the currency slide over 20 per cent against the dollar. It is currently trading at $1.23. And analysts are concerned that, from the little that has been revealed, May's plans for a hard Brexit could hamper trade and hurt sterling further.

Forecasts in an October poll of 60 strategists by Reuters revealed expectations that the pound would slide more than previously thought.

While this will help UK exporters by making the goods they sell abroad cheaper, input prices for British companies buying from abroad will rise. The results are already being felt with the high-profile "Marmitegate" saga in October, as well as a raft of other retailers indicating that they will need up their prices in order to protect profit margins.

However, the expectation of a drop to $1.15 was the median response from analysts and some remained more positive.

"Next year, we see the economy holding up somewhat better than some commentators still fear, whilst hopefully we should get a little more clarity on Brexit arrangements," said Chris Hare, an analyst at Investec.

Analysts highlighted that the euro would also be affected by Britain's exit from the EU and therefore it was unlikely that a euro would be worth more than a pound in absolute terms – only a sixth of analysts felt that this would happen.

"We don't think euro/sterling will fall below parity as the euro is under depreciation pressure as much as sterling," said Colin Asher of Mizuho Securities.