Economists at Standard Chartered expect the Pound Sterling (GBP) to underperform as the Bank of England is likely to cut at a quicker pace than they had previously expected.
We already expect EUR/GBP to depreciate to just under 0.9000 by early 2025.
The more rapid pace of easing that we now see adds a little more risk of GBP underperformance in coming months.
Most of the risk is concentrated in the next quarter or two, where our forecast has GBP firming slightly against the USD. We do not see major downside risk, rather risk that GBP keeps treading water at current levels.