International Netherlands: The coexistence of tight UK fiscal policy and monetary easing may suppress the pound.

Jin10 data reported on October 13, analysts from ING stated that the actual performance of the UK economy has not been as weak as reported by local media, but the risks of tightening fiscal policy and loosening monetary policy may put pressure on the pound. Analysts pointed out that the market currently underestimates the future rate cuts by the Bank of England, although the next rate cut is not expected to occur until February next year at the earliest. Chancellor of the Exchequer Reeves will have to reduce the fiscal deficit through tax increases or spending cuts in the November autumn budget. ING added that due to political uncertainty in France, the appeal of both the pound and the euro is limited, but the fiscal and monetary risks facing the pound “may be higher.”