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2025-09-12 22:43:39
Barclays analysts say the pound could rebound as markets are overly pessimistic about the UK's fiscal situation and economic outlook. They say that while the government's fiscal space has disappeared, debt does not appear unsustainable. Meanwhile, the UK economy has proven more resilient than feared over the past few years. The market is bearish on the pound and expects it to fall. If the government submits a credible autumn budget in November that adheres to fiscal rules and ideally favors spending cuts and expanded fiscal space, this will create conditions for a rebound in the pound. Barclays predicts that if fiscal uncertainty is resolved, the euro/pound exchange rate will fall from the current 0.8654 to 0.84-0.85 pounds.
