GBP underperformance to persist amid poor UK economic outlook – MUFG

The Autumn Statement yesterday from Chancellor Hunt provided no fiscal surprises with a grim outlook confirmed. Therefore, economists at MUFG Bank expect the British Pound to remain under downside pressure.

UK current account deficit will remain over 5% of GDP in 2023-24

“The Autumn Statement again highlights the poor outlook and downside risks for the Pound.” 

“The record current account deficit is forecast to improve (the OBR assumes GBP/USD at 1.1500 for the forecast period) but will remain elevated at 5.8% this fiscal year and 5.2% next fiscal year.” 

“Expect GBP underperformance to persist.”