Barclays: The pound may recover as concerns over fiscal and economic growth are excessive

Analysts at Barclays stated in a report that the market's pessimism regarding the UK's fiscal situation and economic outlook may be excessive, and the British pound is expected to rebound. They pointed out that although the UK government's fiscal leeway has disappeared, the debt level does not appear unsustainable. Meanwhile, the resilience of the UK economy over the past few years has also exceeded previous concerns. Currently, the market is generally shorting the pound, expecting it to decline. If the government launches a credible autumn budget in November, adheres to fiscal rules, and preferably achieves this by leaning towards spending cuts and expanding fiscal space, it will create "conditions" for a rebound in the pound. Barclays expects that if fiscal uncertainty is eliminated, the euro to pound exchange rate will drop from the current 0.8654 to between 0.84 and 0.85