A Union flag flies next to the flag of the European Union in Westminster, London, Britain June 24, 2016. REUTERS/Toby Melville
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The British pound dropped sharply to a new 31-year low Tuesday amid concerns that the country's decision to leave the European Union might cause a steep slide in U.K. commercial real estate values and hurt the wider economy. Markets were jittery after three financial firms stopped trading in their respective U.K. commercial property funds following a rapid increase in investors trying to sell their holdings. The funds buy commercial property and offer shares to investors.Aviva Investors, Standard Life and M&G Investments said they froze the funds to protect other investors who wished to remain in the funds.The Bank of England had cited the commercial real estate market as one of the risks to the British economy, saying the sector has taken in capital from overseas and had become "stretched".The concern is that other funds will have to be frozen as investors look to get their money back.The fund managers will now have to sell commercial property to return money to the investors.
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