While the FX market still seems to see a soft landing in the US at least within the realm of possibility, the ship has probably sailed in the United Kingdom. Economists at Commerzbank expect the British pound to face a tough time to attain gains.
Hard landing for the pound?
“The Bank of England expects a longer-lasting recession from the end of the year.”
“Rising energy costs are a key reason for the BoE's significant upward revision of its inflation forecast. Of course, the BoE also expects to get inflation back under control. However, everything depends on how the energy crisis in Europe develops.”
“The BoE's course is not set in stone either, and the risks in GBP exchange rates remain high.”