Sterling plunged to a fresh 31-year low against the dollar in two minutes of chaotic trading in Asia, with traders saying the slump was exacerbated by computer-initiated sell orders.

The 6.1 per cent slide is the biggest since the announcement of UK’s Brexit referendum result and drove sterling as low as $1.1841 (£0.95), its weakest level since March 1985.

At least one electronic trading platform recorded a transaction as low as $1.1378 (£0.92), said traders.

The sharp fall of sterling will intensify the pressure on Irish exporters and increases calls for the Government to act to support them in the Budget.

The extent and speed of the drop adds to signs that bouts of extreme volatility are becoming more commonplace in the global currency market as the volume of transactions dwindle and algorithmic traders pick up market share.