The Pound continued to strengthen in July hitting fresh year-to-date highs against the US Dollar and Euro. Economists at MUFG Bank analyze GBP outlook.
Turning point has not yet been reached
We believe that the Pound’s recent strong rebound is starting to lose some upward momentum.
Evidence of much weaker UK growth in the 2H of this year and/or a faster-than-expected slowdown in inflation will be required to trigger a reversal of Pound gains.