Sterling: an old story gets interesting

Sterling is rarely a popular currency – low yielding despite the country’s high inflation, slow economic growth, a current account deficit and a fiscally constrained government. But the list of negatives is well-known and is priced in, explaining much of the currency’s current undervaluation. What has changed most recently is the rest of the world – which now looks more like the UK. Evidence comes from our economic surprise indicators (ESI) and our carry-trade barometer, which suggest scope for