Bank of England governor Mark Carney said the risk of a no-deal Brexit was ‘uncomfortably high’

Businesses and investors are scrambling to protect themselves against a plunge in the value of the pound if Britain crashes out of the EU in March.

Sterling’s “fear gauge” — a closely watched measure of the cost of hedging against big declines in the currency — has climbed sharply in recent weeks.

The pound slid on Friday after Bank of England governor Mark Carney said the risk of a no-deal Brexit was “uncomfortably high”, briefly dipping just below $1.30. Moves in options markets, though, suggest that investors are preparing for a much bigger drop in the event of no deal.

“It’s likely to be a move of similar magnitude to what we saw after the referendum,” said Simon Derrick, chief currency strategist at BNY Mellon,