Sterling Likely to Weaken Modestly if BOE Avoids Lifting Rates
Dow Jones08-04 19:32
1132 GMT - Sterling could fall slightly over the remainder of the year if the Bank of England refrains from raising interest rates and the U.K. economy weakens, Metzler analyst Leon Ferdinand Bost says in a note. "This is even more true against the euro if the European Central Bank raises interest rates again in September and the eurozone economy continues to perform solidly, as we expect." However, fiscal concerns shouldn't prove a structural burden for the cu8rrency, he says. Prime Minister Andy Burnham probably won't overstep the fiscal rules, instead delivering a gradual reduction in the budget deficit, he says. Metzler expects the euro to rise to 0.88 pounds by year-end from 0.8464 currently.
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