MUFG Research discusses the implications on GBP from the policy changes under the new PM Truss.
"New PM Liz Truss is set to outline plans for significant fiscal stimulus including further support to combat the energy crisis and lower taxes," MUFG notes.
New measures will help to improve UK growth and inflation outlook. Normally an improving cyclical outlook and higher rates would encourage a stronger GBP but structural problems from twin deficits remain a concern as financing conditions tighten," MUFG notes.
"We are not yet confident that the lows are in place for cable as the USD continues to strengthen broadly," MUFG adds.