Sterling takes a pounding, but is it near its lows?

Undervalued by 26%

clock • 4 min read

It is perhaps little wonder that investors should be glancing nervously at the pound. The last time inflation ripped higher during the 1970s, a sterling crisis ensued.

Is there another crash in the offing? We think there are risks. But at some point, possibly at valuations not too far below where the pound now sits, so much bad news will have been priced in that the currency will look a bargain. Certainly, the UK has a plethora of problems. There is the energy shock, rising public debt, a big trade deficit and looming recessionary risks set against a backdrop of one of the highest inflation rates in the developed world. All of which, in part, explains why sterling trades at such a steep discount against the dollar. We estimate sterling is undervalue...

To continue reading this article...

Join Investment Week for free

  • Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
  • Get ahead of regulatory and technological changes affecting fund management
  • Important and breaking news stories selected by the editors delivered straight to your inbox each day
  • Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
  • Be the first to hear about our extensive events schedule and awards programmes

Join now

 

Already an Investment Week
member?

Login

More on Currencies

US crypto giant Circle files for IPO

US crypto giant Circle files for IPO

Second attempt at IPO

Linus Uhlig
clock 03 April 2025 • 1 min read
Crypto staking 'another milestone' in the mainstream acceptance of asset class

Crypto staking 'another milestone' in the mainstream acceptance of asset class

Changes to FSMA today

Linus Uhlig
clock 31 January 2025 • 5 min read
'FOMO' drives 84% of crypto investors to make trading decisions

'FOMO' drives 84% of crypto investors to make trading decisions

Findings from a Kraken survey

Linus Uhlig
clock 20 December 2024 • 2 min read
Trustpilot