Burnham's Brexit Talks Spark Pound Optimism
The British Pound (GBP) has been boosted by recent developments in Brexit negotiations. According to MUFG, Prime Minister Andy Burnham's willingness to discuss EU membership, the single market, and a customs union could give Sterling a source of support beyond higher interest rates.
Burnham told ITV News that he would not rush decisions on Britain's future relationship with Brussels, underlining the longer horizon for any economic benefits. MUFG expects the Bank of England to begin raising rates in November, but flags the next fiscal announcement as an important event risk for the pound heading into year-end.
Crédit Agricole's latest outlook warns against assuming that high yields guarantee further currency gains, saying the GBP could remain vulnerable if growing political and stagflation risks fuel concerns about the UK economic and fiscal outlook. Despite this caution, its forecasts allow for stronger Sterling in 2027, with a projected EUR/GBP rate of 0.84 in September.