Mitsubishi UFJ Financial Group (MUFG) is down on the GBP, citing a Bank of England rate cut:

• We think the Bank of England’s (BoE) interest rate cuts are priced too cautiously this year and expect the BoE to cut further, making the pound likely to underperform against non-dollar currencies later in the year and the US dollar then weaken wider

MUFG also cites energy prices, saying the UK is vulnerable to rising gas prices (this in relation to Ukraine refusing to renew a contract to deliver Russian natural gas through Ukraine to Western Europe):

• The UK’s lack of storage capacity makes it more vulnerable to market price movements and raises fears of further utility price rises this year.

• Higher energy prices will affect consumer spending, undermine business confidence and increase costs

This article was written by Eamonn Sheridan at www.forexlive.com.



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