BofA: Divergence in rate cuts between Central Bank of Europe and UK to boost the pound against the euro

On February 27, the U.S. Bank forex strategist Kamal Sharma said in a report that the interest rate cut by the European Central Bank should exceed that of the Bank of England, and the pound may rise against the euro this year. The UK’s economy is still constrained by structural factors, but it still has the potential to outperform Europe. Even if the Bank of England accelerates the pace of interest rate cuts, the pound will not weaken if it can support the economic rise and alleviate concerns about fiscal policy challenges. The prospect of the Labour government improving the UK’s relationship with the EU may also support the pound. It is expected that the euro/pound will fall to 0.80 in the fourth quarter of this year.