There are too many reasons pointing towards weaker sterling – Commerzbank

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It is unlikely that UK politicians are going to regain market confidence any time soon. Therefore, the British pound is set to remain under pressure, economists at Commerzbank report.

“All the issues like high inflation, the looming recession and the effects of Brexit, which were in place prior to the government crisis and constitute a considerable challenge for the politicians are likely to ensure that markets remain cautious.”

“Against the background of a struggling economy, the BoE is likely to fight high inflation levels comparatively cautiously so that monetary policy will continue to put pressure on sterling. The fact that the BoE has intervened on the markets with bond purchases, thus threatening its credibility, is not likely to be forgotten easily by the markets either.”

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