GBP/USD lacks follow-through beyond 1.21. Economists at MUFG expect the British pound to continue struggling over the coming weeks.

Bank of England forecasts GDP contraction for five consecutive quarters

“The BoE is forecasting GDP contraction for five consecutive quarters commencing in Q4 2022 and the baseline assumptions do not assume energy supply restrictions that result in blackouts and potentially major disruptions so we’d expect this story if confirmed to undermine confidence in the outlook for growth even further.”

“The pound is the 2nd worst performing G10 currency so far in August and we see no reason for that performance to change over the coming weeks.”