Economists at Morgan Stanley Research discuss GBP outlook. Monetary policy divergence could weigh on the British Pound.
BoE is done hiking
“We remain tactically neutral on GBP but see risks skewed to the downside.”
“We expect the BoE to be done with its hiking cycle now, but incoming data over the next few weeks will be crucial for the May rate decision.”
“This is in contrast to the Fed and ECB where we see another 25 bps hike next month. This policy divergence should weigh on the GBP and EUR/GBP should continue to trend higher.”
