Mitsubishi UFJ: The British pound faces downside risks, and the market may be underestimating rate cut expectations.

Derek Halpenny of Mitsubishi UFJ Financial Group said in a report that the British pound may fall in the coming months, as the pricing seems insufficient due to expectations of further interest rate cuts by the Bank of England. He noted that comments made by Bank of England Governor Andrew Bailey and other policymakers to the Treasury Select Committee on Tuesday suggest that the decision on March 19 is still uncertain. The next employment report will be key to this decision. Halpenny said that if the data continues to show a gradual slowdown in the labor market, it is very likely that interest rates will be cut at that time. "With the inflation rate expected to drop to target levels in May, there is a high likelihood of another rate cut in June." The pound rose 0.2% to $1.3513. The euro fell 0.1% to 0.8720 pounds.