GBP/USD plunged to a record low on September 26. HSBC economists expect the pound to remain under pressure amid the concern about UK structural challenges and policy credibility.
The BoE will buy long-term Gilts every weekday until October 14, 2022
“On September 28, the Bank of England (BoE) unexpectedly announced that it would buy long-term Gilts every day of the week until October 14, 2022 to stabilize the Gilts market, and that the start of its quantitative tightening (QT) program would be postponed to October 31, 2022. But for the British pound, this intervention fails to address the underlying driver of that market failure, which is market unrest with the divergent implications of UK fiscal and monetary policy.”
“With markets concerned about structural challenges and the credibility of UK policy, the pound remains vulnerable.”
Source: Fx Street
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