📝 GBP Could Fall to Parity Against The Euro: Société Générale

The U.K. economy facing higher inflation and weaker growth vs the eurozone could send sterling into parity vs. the euro. The U.K. economy has underperformed the eurozone since end-2019 and this should continue as the U.K. has lost more workers than elsewhere. The U.K.'s reduced labor force is evident through higher wage demands and worker shortages could result in a more unattractive trade-off between inflation and growth, and earlier/faster interest rate hikes than the other major economies. GBP liked that at first, but the positives wear off after a while, and we've now reached that point. - Société Générale FX Strategy