Some of the world’s biggest hedge funds, many of which sat on the sidelines during the UK’s vote to leave the EU, have now moved aggressively to bet against the pound and British stocks in the expectation of a sharp deterioration in the UK economy.

Although there were sharp swings in sterling during Thursday’s referendum, hedge funds largely avoided taking big positions in the run-up to the vote because of uncertainty over the result.

But several hedge fund mangers said they were now targeting the pound and UK company shares considered most vulnerable to a British recession. The managers said they were selling sterling and the FTSE 250 stock index, which consists of companies linked to the home economy rather than the more globally focused FTSE 100 index.