Sterling to show renewed weakness through early 2023 – Wells Fargo

Economists at Wells Fargo the British Pound to struggle in the months ahead amid a bleak UK economic outlook and a more dovish Bank of England.

British Pound to be an underperformer

“We forecast a protracted recession in the United Kingdom, reinforced by the government’s fiscal consolidation in its Autumn Statement. As a result, we expect Bank of England rate to lag behind the Fed and market participants’ expectation, while we also see the UK central bank easing monetary policy by late next year.” 

“Against this backdrop, we expect the Pound to be an underperformer within the G10 currencies, showing renewed weakness through early 2023 and only a modest rebound thereafter.”