- UK deficits are unsustainable in the medium-term and are a factor behind the recent weakness of the pound
- Road ahead still bumpy, long way before recovery complete
- MPC ready to resume asset purchases (QE) or tighten policy if required.
Cable is holding firm despite the Bean comments. Usually we would tumble on talk of unsustainable deficits, but the market trades as if it is short…Cable trades at 1.5230.
