STERLING fell to around $1.22 yesterday and remained under severe pressure against the euro on “hard Brexit” fears, as a survey underlined Scottish manufacturers’ worries about leaving the European Union.

The survey, by accountancy firm Henderson Loggie, revealed the proportion of Scottish manufacturers with a negative outlook on the impact of Brexit was three times the percentage expressing a positive view.

Trade union Unite will publish a report today asserting investment decisions by major car manufacturers on the production of up to 15 new models in the UK are “hanging by a thread” unless the UK Government secures tariff-free access to the European single market.

It emerged yesterday that the Treasury believes a “hard Brexit” that involves leaving the single market could ultimately cost the UK up to £66 billion annually in terms of public sector receipts, based on the potential hit to gross domestic product on a 15-year timeframe.

Bank of England Financial Policy Committee member Anil Kashyap told the Treasury Committee yesterday that he was still “very concerned” about the possibility of a slowdown in the UK economy following the Brexit vote.

And Michael Saunders, a member of the Bank’s Monetary Policy Committee, said he would not be surprised to see sterling fall further.

Jeremy Peat, visiting professor at the University of Strathclyde’s International Public Policy Institute, warned this week that the UK economic outlook appeared “bleak”, observing that Conservative politicians seemed prepared to forego access to the single market in favour of a severe reduction in immigration.

Robert Rooney, head of Morgan Stanley’s operations in Europe, the Middle East and Africa, signalled a belief that investment banks would have to start moving activities and jobs from London to continuing EU member states if single market access were lost by the UK.

As the UK Government’s Brexit woes mounted, the pound for a second day running dropped to its lowest level on its trade-weighted index against a basket of currencies since early 2009. The sterling trade-weighted index fell to 73.9, from 74.3 at Monday’s close.

Sterling dropped to around $1.22 during yesterday’s session and was, at 5pm, trading around $1.2216, down 1.79 cents from its Monday close in London. The pound was trading close to $1.50 on June 23, ahead of the referendum result.

The euro was, at 5pm, trading around 90.52p, up 0.43p on its Monday close in London, and later moved up to around 91p.

Of Scottish manufacturers asked in the Henderson Loggie survey about the EU referendum result and its impact on business confidence, 39 per cent reported a negative outlook and only 13 per cent had a positive view.

Henderson Loggie said: “As it could be several years before we have a full understanding of the impact of Brexit, not surprisingly 48 per cent remained neutral.”

The survey showed that 23 per cent of Scottish manufacturers believe uncertainty following the EU referendum vote will be “a main barrier to growth”.

Henderson Loggie noted the proportion of Scottish manufacturers expecting growth over the next 12 months had fallen sharply since the last annual survey. Of the 37 Scottish companies of all sizes included in the accountancy firm’s UK-wide poll of 560 manufacturers, 60 per cent predicted growth on a 12-month view, down from 74 per cent in the previous survey.

Mr Saunders told the Treasury Committee yesterday that sterling’s trade-weighted exchange rate was roughly 15 per cent lower than a year ago, with about three-quarters of that move having come after the EU referendum.

He added: “Given the scale and persistence of the UK’s current account deficit, I would not be surprised if sterling falls further, but I am fairly agnostic as to whether any further depreciation is likely.”

Mr Kashyap said: “I am still very concerned about the possibility of a slowdown. A temporary increase in uncertainty will lead to a strong increase in what economists call the ‘option value of waiting’.”

Commenting on Brexit-related issues for the banking sector at a conference in London, Mr Rooney said: “It really isn’t terribly complicated. If we are outside the EU and we don’t have what would be a stable and long-term commitment to access to the single market, then a lot of the things we do today in London we’d have to do inside the EU27.”

A survey published by the Food & Drink Federation today shows, following the UK’s vote to leave the European Union, 75.6 per cent of companies in the sector have experienced increased ingredient and raw material prices, with 63 per cent reporting a drop in product profit margins.

Meanwhile, 71 per cent of food and drink firms with EU staff say these employees have expressed concerns over the Brexit result.