Sterling’s Rally Must Battle Winter Headwinds: Marcus Ashworth

It’s a struggle to come up with any potential upside factors for UK Plc at the moment. The economy is flatlining, the political backdrop is bleak and the government faces tough tax and spending decisions in next month’s budget. All of which means the pound will struggle to hold onto this year’s 6.4% appreciation to the dollar; furthermore, its 5% decline against the euro may worsen.

Sterling has remained relatively perky — at about $1.34 it’s a touch better than its one-year average of around $1.31 — because the Bank of England has been slow in lowering interest rates as UK suffers the ...