As the Bank of England (BoE) is probably acting too cautiously and the election of the new prime minister could cause a bit more nervousness in the markets, the British pound is set to remain under pressure, economists at Commerzbank report.

Election likely to weigh on the pound

“The concerns about the economy – after all, the BoE expects a recession next year – seem to prevent the BoE from implementing a truly active monetary policy to fight inflation. This should make the pound unattractive from an investor's point of view.”

“The pound could remain under depreciation pressure as long as the prospects for Truss to win the election remain favorable.”