In the United Kingdom, inflation is likely to be fuelled further, increasing pressure on the Bank of England (BoE). Thus, GBP/USD seems to continuously trend weaker at present, economists at Commerzbank report.

No GBP recovery in sight

“The continued rise in gas prices entails the risk that the recession will be more pronounced and longer than previously expected. The pressure on the BoE is increasing to balance fighting the recession against high inflation rates.”

“Sterling is affected by structural issues. The effects of Brexit have not been overcome (e.g. labour shortage) and the currently ongoing leadership contest in the Tory party and the resulting uncertainties about the fiscal policy approach regarding economic challenges entails further risks.”