Goldman Sachs note that “after being the top performing G10 currency year-to-date at the start of summer, GBP unwound most of its gains by the end of it.”

• “The weaker cyclical outlook in Europe and, moreover, the BoE's dovish reaction function have outweighed the benefits from lower energy prices and broadly constructive risk sentiment.”
• “A combination of weaker growth, high inflation, and lower real rates is a negative mix for the currency.”
• “Therefore, we are revising down our GBP/USD forecast path to $1.18, $1.20, $1.25 in 3, 6, 12 months (vs. $1.24, $1.29, $1.33 previously) - implying a EUR/GBP path of GBP0.91, GBP0.92, GBP0.90 (vs. GBP0.86, GBP0.85, GBP0.84 previously) - and officially shifting back to GBP bears.”