The six-month delay to Brexit has reignited fears in the City that Jeremy Corbyn will become the next prime minister of the UK, with concerns his arrival will send markets into freefall and cause hundreds of billions of pounds to leave the country.

The decision last week by European Union leaders to push Britain’s departure from the trading bloc back to October 31 has increased the chance of a UK election, with the latest betting odds showing the Labour leader as the favourite to take power.