EUR/GBP should return to 0.88 at the end of the year – Natixis

After remaining relatively stable since the beginning of the year, the GBP ended up appreciating significantly in May. However, economists at Natixis expect the Pound to struggle in the second half of the year.

A weaker GBP in the second half

Despite its rebound, we remain cautious with regard to the GBP, which is likely to start falling again, bearing in mind that the continued rise in key rates will only exacerbate the deterioration in economic activity, and in particular in the real estate market.

Moreover, there is also the risk that the BoE will not raise its key rates as much, which would also weigh on the GBP. Against this backdrop, the EUR/GBP should return to 0.88 at the end of the year.