06/27/2016 08:32 EDT | Updated 06/29/2016 03:59 EDT

British Pound Falls To 31-Year Low As Scotland Says It May Block Brexit

Trading in British banks briefly halted.

LONDON — Scotland's Parliament could attempt to block Britain from leaving the European Union, the Scottish leader said Sunday as the turmoil following the historic referendum spread and the leader of the opposition Labour Party faced an open revolt in his party.

Scottish First Minister Nicola Sturgeon, determined to keep Scotland inside the EU, said on BBC that she would consider advising the Scottish Parliament not to give "legislative consent" to a British exit, or Brexit.

She said withholding Scotland's consent might block Britain's plans to leave the union.

Scotland's First Minister and Leader of the Scottish National Party (SNP), Nicola Sturgeon, addresses the media after holding an emergency Cabinet meeting at Bute House in Edinburgh, Scotland on June 25, 2016, following the pro-Brexit result of the UK's EU referendum vote. (Photo: OLI SCARFF/AFP/Getty Images)

The pound dropped to a new 31-year low on Monday, trading below US$1.32 for the first time since 1985. By midday in London it was at $1.3216.

The drop reflects investors' concerns about the economic impact of Britain's departure from the European Union. It also shows they are expecting the Bank of England to cut interest rates in coming months as the economy suffers.

Additionally, trading in shares of two big British banks was been temporarily suspended amid volatility in the markets following the country's decision to leave the European Union.

The London Stock Exchange said trading in the Royal Bank of Scotland and Barclays was automatically suspended when they briefly moved out of the trading range of 8 per cent. RBS is down 14.6 per cent to 175.55 pence ($2.40). Barclays is down 10 per cent to 137.55 pence.

Trading resumed after five minutes.

UKIP leader Nigel Farage is seen on TV as traders from BGC, a global brokerage company in London's Canary Wharf financial centre react during trading June 24, 2016 after Britain voted to leave the European Union in the EU Brexit referendum. (Photo: Reuters/Russell Boyce)

Other British stocks are also experiencing sharp volatility in the aftermath of the vote. They include airline EasyJet, home builder Taylor Wimpey and insurer Legal & General.

Voters in Scotland and Northern Ireland backed staying in the EU in Thursday's referendum, but the role of Scotland's Parliament in a final decision has not been made clear.

"I find it hard to believe that there wouldn't be that requirement," Sturgeon said of the need for Scotland's approval. "I suspect that the U.K. government will take a very different view on that and we'll have to see where that discussion ends up."

The Scottish question looms large because Sturgeon has also said another referendum on Scottish independence from Britain is "highly likely" as a result of Britain's decision to leave the EU.

Sturgeon's Scottish National Party does not enjoy an outright majority in the Scottish Parliament — created in 1998 as part of the devolution process — but she emerged from the EU referendum unscathed. The opposite is true for the leader of the British opposition Labour Party, Jeremy Corbyn, who is under increasing pressure to step down because of the referendum result.

U.K. Labour Party Leader Jeremy Corbyn addresses supporters and members of the media as he launches his party's local election campaign on April 5, 2016 in Harlow, England. Corbyn is facing an insurrection inside his own party after Labour failed to deliver a victory for the "Remain" side in the Brexit referendum. (Photo by Carl Court/Getty Images)

The Labour Party advocated remaining in the EU but many party insiders say Corbyn's lacklustre campaigning did little to promote the party's cause.

Thus far, the pressure on Corbyn comes from his "shadow cabinet," a British institution in which the main opposition party designates senior figures to advisory positions, such as "shadow chancellor" or "shadow health secretary." Its members advise the leader on what policies Labour should embrace.

Seven members in the shadow cabinet resigned Sunday after Corbyn fired shadow foreign secretary Hilary Benn overnight. The dissidents want Corbyn, who represents the far-left wing of the party, out of the picture before the next general election, which may happen sooner than expected because of the Brexit turmoil.

Shadow heath secretary Heidi Alexander released her resignation letter Sunday after stepping down.

"I do not believe you have the capacity to shape the answers our country is demanding and I believe that if we are to form the next government, a change of leadership is essential," she wrote bluntly to Corbyn.

Corbyn did not respond publicly to the co-ordinated assault on his leadership, but senior allies said he would remain in the leadership role and that he still has strong support among the party's rank and file members.

Prime Minister David Cameron has said he will resign when a new leader of the Conservative Party is chosen at a party conference in October.

It is possible the new party leader, who would become prime minister, would call a "snap election" to validate his or her position. Corbyn's opponents want a different leader in place in case that happens.

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