Oliver Mangan: Difficult to see sterling recover lost ground on bleak outlook for UK

British economy underperforming due to ongoing negative impact of Brexit, anaemic labour force growth and declining inward migration from the EU

The challenge facing sterling will be even greater if the economy’s weak performance sees the Bank of England start to cut rates well ahead of other central banks.

The British economy has become a marked underperformer, a record that stretches back to the start of the pandemic in 2020 and Brexit. UK GDP fell by a whopping 11% that year, compared to much smaller declines of 6.3% for the eurozone and 2.8% in the US. 

It was hoped  this gap would be closed by a much stronger rebound by the UK economy in 2021-2022.