GBP/USD remains under intense selling pressure below 1.1300. Economists at MUFG Bank do not expect further improvement in confidence from here. 

GDP forecasts will remain grim

“We still see renewed GBP weakness ahead with a danger of a rush to retrieve investor credibility going too far and worsening notably the already grim economic outlook.”

“The BoE indicated its determination yesterday by denying the FT report that it would delay the start of QT, scheduled for 31st October. Given that is the same day as the updated fiscal details, the BoE probably wants to maintain pressure on the government.”

“Starting QT in the current environment is likely to weigh on investor sentiment and coupled with a deeper than previously expected contraction in GDP, the pound is likely to suffer.”