Accumulation of bad news from the UK justifies a weak Sterling – Commerzbank GBPUSD UnitedKingdom Banks Growth
GBP/USD has dropped below 1.2250. Economists at Commerzbank note that the dire overall situation the UK is currently in justifies a weak Sterling.“Whereas the most urgent real economic factors putting pressure on the economy seem transitional on the Continent the urgent British woes seem to be more permanent. It is therefore not implausible to assume a long-term growth disadvantage for the British economy as compared with Europe.
“As long-term growth is relevant for real exchange rates the prospect of that plays a role for today’s exchange rates. And that is why this accumulation of bad news from the island constitutes a sufficient justification for Sterling to be weak.”Information on these pages contains forward-looking statements that involve risks and uncertainties.
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