Danske Research discusses GBP outlook around this Mondays upcoming UK Conservative party leadership election.
"We expect substantial fiscal easing if Liz Truss takes office as UKs next PM, which would add further upside pressure on inflation and yields," Danske notes.
"We expect the GBP FX impact to be limited in our base case although the potential for higher rates could add slight support. Importantly, EU-UK relations could re-emerge as a theme for markets. We continue to regard EUR/GBP as a range play for the coming months," Danske adds.