The British pound has weakened in the past month as mounting economic pressures are furrowing the outlook. Economists at the National Bank of Canada expect the GBP to remain capped in the near-term.

Political shuffle

“The British economy is facing similar challenges as the rest of Europe as inflation runs rampant.”

“While the bank of England appears set to continue restricting monetary policy to tame inflation and avoid further depreciation of the currency, challenges arise from other spheres.” 

“In somewhat of a historic move, Prime Minister Boris Johnson resigned from his role following a spate of abandonment from party members. While his dismissal will usher in new management, it is to be seen how government policy may differ from the avid Brexiteer.” 

“We expect the pound to remain relatively contained in the near-term as growth likely moderated.”