Economists at Wells Fargo expect significant weakness in the pound, targeting a GBP/USD low around 1.0600 in early 2023.

BoE to under-deliver on monetary tightening

“Although political and policy uncertainty may be reduced to some extent by the change in leadership and reversal of fiscal stimulus proposals, the outlook for the U.K. economy remains challenging.”

“Not only do we expect UK recession, but we also forecast the Bank of England will raise policy rates less than market participants currently expect – the combination of which could see the pound drop to around 1.0600 by Q1-2023.”