Economist Julian Jessop on Wednesday warned that Britain's economy could end up in a "doom loop" of falling currency and rising interest rates, but stressed that he believed recent market moves had been an over reaction.

"I think it is correct to be concerned about the fall in the pound and the rise in long term interest rates, and there is a risk that we do end up in a doom loop of a falling currency, rising interest rates and weaker growth which obviously would undermine the agenda the new government," he told Radio 4.

"But I also think that people have overreacted in the heat of the last few days." (Reporting by William James; Editing by Kate Holton)