This via the folks at eFX.
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- "Considering the size and breadth of the fiscal package, even a 75bp hike seems likely to leave the BoE behind the curve on taming inflation and well below market pricing which is now close to 100bp," GS notes.
- So against the backdrop of the large fiscal spend and question marks around the size and urgency of the monetary response, we are revising our GBP forecasts weaker vs EUR to 0.92, 0.90, 0.88 in 3, 6, and 12 months (vs 0.85, 0.83, and 0.84 previously. We are also downgrading our GBP/USD forecasts for 3, 6, and 12 months ahead to 1.05, 1.08, and 1.19 (vs 1.14, 1.17, and 1.25 previously)," GS adds.
As you will all be aware, that lowest forecast from GS for GBP/USD at 1.05 was hit yesterday, even lower than that!
