GBP was trading at €1.148 on 9th November 2018, which was close to initial high of €1.15 on the day prior, the highest within six months.
However, warnings from the European Commission states that economic growth for the UK in 2019 would only amount to 1.2 percent. This is in comparison to the 2% growth expectation for the rest of the European Union.
The prediction also pales in comparison to that of Ireland, which is projected to be an astonishing 4.5 percent.
Predictions Based on Assumptions
Much of the devaluing of GBP has been due to the ongoing talks surrounding Brexit. Although a meeting held on 9th November 2018 showed to be beneficial, there is still no robust Brexit plan in place, which is why there is so much conflicting predictions in relation to the currency.
Sterling investors noted that the prediction being made on based on a soft Brexit, which has still not been confirmed. There is conflict from both sides as to how Brexit should be implemented, so until a final decision is made, it’s difficult to know which way the wind will blow in relation to losses and gains.
The current prediction of 4.5 percent in relation not economic growth will help support the pairing, but it’s likely that GBP will take some further hits before finding a comfortable sitting in the world of Forex, which means that investors will have to test the waters when it comes to making investments.
Italy’s Economic Projections are Also Lacklustre
Despite economic growth looking bleak for Pound sterling in 2019, there situation is just as lacklustre in Italy.
Italy matches the United Kingdom in relation to projected economic growth, which is set at 1.2 percent. This falls below the initial estimates of 1.5 percent set out by Rome, meaning that Italy is running at a deficit of 2.9 percent.
As expected, this places more pressure on EUR, and the GBP/EUR pairing overall. Although there is positive news in relation to both currencies, it seems the thunder could be stolen depending on what the next update are, meaning investors are approaching with caution when it comes to investing.