Deutsche Bank: Potential fiscal plans and interest rate expectations in the UK will threaten the pound's trend

The German Bank said that the pound is at risk as UK Chancellor of the Exchequer Rishi Sunak may announce a £20 billion public finance black hole on Monday evening and the Bank of England may cut interest rates on Thursday. Michael Pfister, a forex analyst at the bank, said in a report that the UK government may need to make difficult decisions to plug the fiscal black hole. He said that the Bank of England may cut interest rates on Thursday, but the pound’s reaction will depend on the rationale for this move. “Considering the continued rise in core inflation, the Bank of England may have to issue a fairly cautious tone to continue supporting the pound.”