21 October 2022 | Other

Pound to keep falling whatever the result of UK leadership race

Regardless of who wins the race to replace Liz Truss as British Prime Minister, one thing is clear: the pound will keep on falling.

Market participants forecast a further decline of sterling as economic factors and the Bank of England's political stance have a negative impact on the currency. Three-month risk reversals for the pound, as an indicator of the expected direction of its movement during this period of time, remain strongly negative.

The weakening pound is a serious problem for the UK, as rising borrowing costs, huge energy bills and high taxes cloud the future prospects of the economy in the country. As consumer confidence approached historic lows in October, there are signs that the pound could continue its decline, which has reached 17% this year.

The Bank of England's stance on monetary policy could be an even bigger obstacle for the pound to stabilize, after deputy governor Ben Broadbent expressed his doubts Thursday about the need to raise UK interest rates to the extent that investors expect them to. 

Company MarketCheese
Period: 10.02.2026 Expectation: 1570 pips
Investing in AUDUSD on RBA hawkish policy shift
Today at 07:04 AM 5
Period: 09.02.2026 Expectation: 815 pips
SPX is at risk of further correction due to revised rate expectations
Yesterday at 11:40 AM 29
Period: 09.02.2026 Expectation: 1800 pips
Silver seeks firmer ground after historic plunge
Yesterday at 11:38 AM 51
Lyra_Moonwell1
Lyra_Moonwell1

Listed among the best MarketCheese authors
1st in the segment "Oil and gas"
Gold buy
Period: 27.02.2026 Expectation: 60000 pips
Gold primed for another $4,400–$4,550 rebound following its recent collapse
Yesterday at 10:55 AM 58
Period: 30.04.2026 Expectation: 23000 pips
Buying BTCUSD from support at $64,000
Yesterday at 09:53 AM 23
Period: 28.02.2026 Expectation: 250 pips
Buying Brent crude with $69.0 in sight
Yesterday at 09:17 AM 28
Go to forecasts