The British Pound registered impressive gains on the back of upbeat economic news on Wednesday. Nonetheless, economists at Rabobank expect the GBP to weaken as the UK still faces a lineup of sour economic fundamentals.

EUR/GBP to grind higher to 0.90 around the middle of the year

“Despite Tuesday’s better news, we remain unconvinced about the UK’s current fundamental backdrop. In the absence of a deal on the Northern Ireland protocol, we expect upside flurries in GBP to be short-lived.”

“The UK still faces a lineup of sour economic fundamentals and we continue to expect EUR/GBP to grind higher to 0.90 around the middle of the year.”

“We see plenty more scope for dips by Cable back below the 1.20 level in the weeks ahead.”