According to HSBC (and Fidelity, Blackrock and GS Asset Management) the pound’s set for a tumble this year, falling as much as 5% as risks weigh on the currency and increase the threat of a sovereign downgrade.
“The pound’s fiscal credibility is under threat as a sovereign downgrade looms,” the bank said in its 2013 HSBC View published on Monday.
Alongside that, the bank says austerity is now kicking in at a time when the MPC appears less activist which could see a ‘what’s wrong with a weaker currency’ attitude prevail.
And the UK’s failings will start to “grab attention” as the US steps back from the fiscal cliff, momentum grows in China, and eurozone break-up fears diminish.
Full article... UK Telegraph
