Mitsubishi UFJ Financial Group (MUFG) is bearish on GBP, citing upcoming Bank of England interest rate cuts:
- We view prices for Bank of England (BoE) rate cuts this year as too cautious and expect the BoE to cut further which could see the non-dollar pound lower later in the year with the US dollar weakening more broadly.
MUFG also mentions energy prices, saying that the UK is vulnerable to rising gas prices (this is in relation to Ukraine refusing to renew a contract to send Russian natural gas through the for Western Europe):
- The lack of storage capacity in the UK makes it more vulnerable to market price movements and there are fears of a rise in utility prices this year.
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Higher energy prices will put pressure on consumer spending, reduce business confidence and increase costs
This article was written by Eamonn Sheridan at www.forexlive.com.
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