Barclays: The pound may recover, as concerns about fiscal and economic growth are excessive.

Barclays bank analysts said in a report that market pessimism about the UK's financial situation and economic prospects may be excessive, and the pound is expected to rebound. They pointed out that although the UK government's fiscal room for maneuver has disappeared, the debt level does not appear unsustainable. At the same time, the resilience of the UK economy in recent years has exceeded previous concerns. The pound is currently being widely shorted in the market, with expectations of a decline. If the government launches a credible autumn budget in November, complies with fiscal rules, and preferably achieves this by cutting spending and expanding fiscal space, this will create "conditions" for a pound rebound. 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.