Commerzbank warns UK political turmoil and unclear fiscal policies may drive EUR/GBP higher in coming weeks.
Mounting political instability in the UK is weighing on the British Pound (GBP) as Prime Minister Keir Starmer faces growing pressure amid resignations and leadership speculation. Analysts cite rising uncertainty over future fiscal policy as a key risk for the currency.
Recent GBP weakness has not fully priced in these risks, with markets underestimating the potential for further declines. Comparisons to prior periods of political volatility suggest prolonged uncertainty could exacerbate currency depreciation.
Commerzbank maintains a bearish outlook on GBP, expecting EUR/GBP to rise in the near term as political risks intensify.