British Pound Falls as Investors Abandon Sterling

Expectations of a weaker pound have investors abandoning the British currency over fears that the economic recovery will weaken in the coming months. Chancellor of the Exchequer George Osborne added to the pessimism last week noting that “the recovery will take longer and be harder than had been hoped”.

“I remain structurally quite bearish on sterling,” Stephen Gallo, the head of market analysis at Schneider Foreign Exchange Ltd. said in an interview. He expects sterling to weaken more than 8 percent against the 17-nation euro by year- end. “When you compare growth potential in the core of the euro area with the U.K.’s, the former’s is actually much better.”

Source: Bloomberg