ANZ says GBP undervalued and supported. BoE rate hike still a year away.
ANZ comments on GBP come via eFX.
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- We still think UK GDP will rise 6.2% this year and 5.3% next. As with elsewhere, a degree of uncertainty persists, but the government is planning for booster jabs from September, which should help the UK's resilience as the winter approaches. There is no doubt that economic and currency forecasting are heavily influenced by COVID
- If employment growth is strong as support is dialled back, we think the Bank of England will begin to normalise policy rates in Q4 next year. That early-mover advantage can support GBP, which remains undervalued