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Bank of America analyst: British pound taking on characteristics of an "emerging market" currency

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Cor blimey, gov!



Sterling is in danger of becoming an "emerging market" currency as falling growth and growing risks cause investors to flee the pound, according to Bank of America.





Central to the gloomy outlook for the pound, Sharma noted, is that the U.K.’s Net International Investment Position has deteriorated in recent years as foreign investors hold a large stock of U.K. assets.


The NIIP measures the difference between U.K. owned asset claims on non-residents and foreign-owned claims on U.K. residents, an important gauge of a company’s creditworthiness.


“This carries with it two risks: overseas investors could repatriate part of this portfolio of U.K. assets on deteriorating confidence in the U.K. economy (asset allocation shift due to the end of negative interest rates elsewhere); or that the large stock of foreign holdings of U.K. assets will continue to weigh on the primary income balance,” Sharma said.


“Whatever the reason, the external trade position will become an increasing focus for markets as the UK economy struggles under the weight of higher inflation and slower growth.”



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17 minutes ago, ThreePi said:

Would you say it's taking a.... pounding?


I think it's a sign of how old we are now that some of our jokes steer offly close to dad jokes.


Edit: To add. When Rule Brittania goes wrong.

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