Why a 'significantly undervalued' pound will bounce back this year

  • Sterling will climb back to levels not seen since the Brexit vote by the start of next year, according to analysts who believe the currency is “significantly undervalued”.


    Oxford Economics said the pound was undervalued “on a wide range of valuation metrics”, while analysts at Barclays said on one measure, sterling had only been cheaper against a basket of currencies during the depths of the financial crisis and the International Monetary Fund UK bail-out in the 1970s.


    Telegraph article


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    It's good to see some positive forecasting for a change. All we seem to get are cries of "We're all doomed." from most quarters over our leaving the EU. ( None of which I might add, has so far materialised. ;))

  • Oxford Economics said the pound was undervalued “on a wide range of valuation metrics”


    It was those same kind of metrics otherwise known as guessing to most people, which said that the would vote to stay in the EU.


    How can these "metrics" predict what's going to happen in the next 12 months? They can't and neither can anyone or anything else predict the future either, especially with the great unknown about Brexit and what, if any, kind of deal we get.


    It's good to see some positive forecasting for a change. All we seem to get are cries of "We're all doomed." from most quarters over our leaving the EU. ( None of which I might add, has so far materialised. ;))


    Yes, but.... since sterling sank, the effects of that are starting to take hold especially with the rise of inflation. This hits people in the pockets and we all "feel it" when we go the supermarkets or petrol pumps etc with rising prices.


    If inflation continues to rise, then the Bank of England will raise interest rates. That, depending on the scale of the rise and the quantity of them, could affect house prices which may, or may not, end the current housing boom.


    I don't need "metrics" to tell me what might happen over the next year. Just a bit of common sense.


    But if I were to put my tinfoil hat on and take a guess at where the pound will be in a years time, and as I make a living from doing just that, I reckon it has lot father to sink.

    If my post is in this colour, it is a moderator decision. Please abide by it.

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