GBP May Weaken Against EUR in Coming Weeks Amid UK Political Uncertainty, Commerzbank Says

According to Commerzbank analyst Michael Pfeifle on May 15, sterling could weaken further against the euro in the coming weeks due to rising UK political uncertainty and fiscal concerns surrounding potential challenges to Prime Minister Keir Starmer's leadership.

Pfeifle noted that political uncertainty "rarely benefits a currency," and it remains unclear what policies a potential successor would pursue. He warned that while the UK's November 2024 budget included deficit-reduction measures, a new prime minister might reverse course, reigniting market concerns about fiscal sustainability.

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