London - 11 October 2016

1. Various of brokers at CMC Market trading floor in the City of London

2. Various of screens showing live currency and stocks exchanges

3. Set up of Chief Market Analyst at CMC Markets, Michael Hewson, talking to a colleague

4. SOUNDBITE (English) Michael Hewson, Chief Market Analyst at CMC Markets:

"I think the concern is the speed of the decline. It did trade in a fairly tight rein of 1.30-1.35 (dollars to the pound). Since then the politics has got a little bit more problematic and I think that's what's driven the decline lower. Certainly since we've broken 1.30 the pace of the decline has accelerated somewhat. Obviously the difficult political situation is part of that. Other factors include a slightly stronger dollar and an anticipation of a US Fed rate rise, but certainly sentiment towards the pound is very bearish at the moment."

5. Cutaway GBP/USD electronic sign

6. SOUNDBITE (English) Michael Hewson, Chief Market Analyst at CMC Markets:

"I think it's still far to early to make any significant decisions about moving domicile or moving European headquarters. Brexit negotiations haven't even started yet. For VTB to move, that's a decision for them. Ultimately moving your domicile is very expensive so ultimately what any bank has to do, when it makes a decision like that, is to work out how much it's going to cost to move its staff, relative to the amount of money it can potentially save. There are still a whole host of matters that are completely unresolved."

7. CMC Market sign

8. Wide of street where VTB bank have their Europe headquarters

9. Mid of Russian and VTB bank flags

10. Pan down from Russian flag to VTB flag

11. Tilt up building to flags

12. VTB flag

The pound continued to drop on Tuesday, falling another another 0.9 percent to 1.2250 US dollars.

A report in The Times newspaper on Tuesday, citing leaked papers from the Treasury department, said a so-called "hard Brexit" could lead to government tax revenues collapsing by 66 billion pounds (81 billion US dollars) a year and that the country's GDP could be 9.5 percent smaller if Britain leaves the single market and operates under standard World Trade Organisation rules.

The report helped put further pressure on the pound.

Add the uncertainty related to the Brexit negotiations and the Bank of England's policies, which could see interest rates cut further, and the outlook remains bleak for the pound.

While the pound's slide against the dollar has captured most of the headlines, especially last Friday when it plunged about 6 percent at one point to a new 31-year low of 1.1789 US dollars, the currency is posting equally dramatic declines against the euro, which is used by 19 EU countries.

One euro is now worth 0.90 pounds compared with around 0.76 pounds just prior to it becoming clear that Britain had voted for Brexit.

The irony of the pound's dramatic fall is that it will help British businesses secure their market share in the EU's single market, of which Britain is still a member until at least 2019, by making their goods more competitive.

Britain's top stock market index, the FTSE 100, struck a record high on Tuesday amid hopes that many of its constituent companies will benefit from the pound's slide.

Meanwhile Russia's state-owned VTB Bank is reportedly making plans to move a major investment banking hub out of London due to Britain's decision to leave the European Union.

VTB deputy president Herbert Moos told the Financial Times newspaper that London will cease to be VTB's European investment banking hub, saying "we did have bigger plans for the London office, but after Brexit we are scaling them down and building them up elsewhere."

The newspaper quoted Moos as saying that possible replacement locations include Frankfurt, Paris and Vienna, while some presence in London will be retained.

VTB's Moscow headquarters said in a statement that the "transfer or retention of the presence in London will depend on the scenario which Brexit follows."

VTB is Russia's second-largest bank and is under US and EU sanctions.