Further sterling slide seen as likely

What once seemed a highly unlikely call on euro-sterling is gaining momentum, with two of the world’s leading banks predicting that euro will attain and even go beyond parity with the pound for the first time.

Morgan Stanley sees the pair at 102 pence by the end of March, which represents a 12% gain for the euro from current levels, while HSBC is sticking to its forecast that the euro will trade one-for-one against the pound by year-end.

Standard Bank strategist Steve Barrow said: “It’s not a huge leap of faith to suggest we could get up to the parity area.” It would be “foolhardy” to rule out the prospect of the euro reaching the one-pound mark, according to Rabobank International’s senior currency analyst Jane Foley.