Sterling to remain at $1.30 or below for rest of 2016 predict world's leading currency analysts
Global wine suppliers can expect the rate for sterling to sit at or below $1.30 for the rest of the year, acccording to a poll of the world's leading currency analysts by Bloomberg.
Its poll of over 30 of the top economic forecasters and currency analysts is for the sterling to drop a further 6% drop by the year-end as continued uncertainty from the UK leaving the European Union means it will not have the support to recover for the rest of 2016.
Sterling is already 11% weaker since the UK’s decision on June 23 to leave the EU.
It reached its lowest level in 31 years when it hit $1.3121 on June 27.
The news comes as the Chancellor, George Osborne, looked to steady the market this morning by floating the idea of lowering the UK's corporate tax rate to 15% to help stimulate more investment in the country.
Britain currently has a 20% corporate rate for business, which is due to drop to 19% in April and 17% in 2020. The Chancellor's move helped sterling increase by 0.2% to $1.3294.
But overall the economic mood is against sterling making any sort of realistic recovery above $1.30.
Of the 36 economic analysts surveyed by Bloomberg survey, 32 are for sterling to end the year at or below $1.30, only two predicting it will go higher.
The median estimate is for sterling to sit at $1.25.
Roberto MIalich, a senior foreign-exchange strategist at UniCredit SpA in Milan, said: “The pound will continue to bear the brunt of the Brexit result.” said
He has cut his year-end forecast to $1.20.
Analysts say a lot will rest on how the Bank of England performs and what it says in its next statements in July and August.
Imre Speizer, a market strategist at Westpac Banking Corp, added. “But ultimately, a lower pound will be required to help rebalance the UK economy.”