The UK is weak, but recent data do suggest it has turned a corner and will not double dip. Nonetheless, the recovery will be gradual and a £50bn extension of the asset purchase programme by the MPC is expected on Thursday. Despite this, GBP has outperformed the EUR and the USD year to date. We expect the outperformance of the EUR to continue, but look for GBP/USD to depreciate as relative outperformance of the US economy leads to a somewhat resurgent USD.
Read the full report: GBP Sound as a pound
Barclays Capital