Trend stronger for GBP later in the year – MUFG

Economists at MUFG analyze the GBP outlook. The British Pound sees brighter prospects later in the year.

Short-term downside risks

“We maintain our view of short-term downside risks as inflation remains a concern and risk conditions remain fragile. However, assuming inflation falls notably and the Brexit deal just agreed improves relations with Europe, we see scope for some GBP outperformance after a sustained period of negativity for the UK.” 

“EUR/GBP – Q1 2023 0.8800 Q4 2023 0.8700 Q3 2023 0.8650 Q4 2023 0.8500”

“GBP/USD – Q1 2023 1.1930  Q2 2023 1.2410  Q3 2023 1.2720 Q4 2023 1.3180”