In the latest instalment of the ‘Four graphs explaining' series, experts consider sterling.
Patrick Farrell, CIO at Charles Stanley
Sterling has enjoyed a strong run over recent weeks, but the outlook is less promising.
Recent strength has been aided by a weaker US dollar in part due to markets pricing in an earlier pivot by the US Federal Reserve.
Meanwhile, in the UK sticky inflation and elevated wage growth are likely to keep pressure on the Bank of England to keep policy tight.
However, the UK could experience the weakest economic growth across the G7 advanced economies next year and we are particularly concerned by the impact of higher interest rates on UK homeowners which has just begun to come through.
