Currency traders are betting that the pound will fall to record lows against the euro if Britain votes to leave the European Union, eclipsing the drops witnessed during the 2008 crash and the 1992 Black Wednesday crisis.

Investors believe that the pound is likely to tumble against the world’s major currencies if Britons decide to initiate divorce proceedings with the EU. Sterling is expected to drop to €1.05 to €1.20 on the day after a vote for Brexit, sliding towards parity with the common currency for the first time in its history.

The market’s bearish outlook for the pound comes as investors clawed $3bn (£2.1bn) out of UK shares in the run-up to the referendum, a sign that fund managers are bracing for the impact of the EU referendum this Thursday.