The British Pound (GBP) underperformed as pillars of bullish momentum have evaporated. Economists at ANZ Bank analyze Sterling’s outlook.

Momentum falters, but hope remains

If the September meeting has seen the conclusion of the BoE’s tightening cycle, this could allow the GBP/USD pair to consolidate back above 1.27 by year-end as the UK economy recovers. 

The growth outlook remains challenging, especially amid rising energy costs, but signs of recent resilience should not be clouded by the more recent souring of activity and growth indicators.