Goldman Sachs Flags Shift in Sterling Drivers

Goldman Sachs says global dynamics now dominate Sterling’s moves, shifting focus from UK domestic factors to a longer‑lasting terms‑of‑trade shock.
Recent UK data showed resilience, contrasting with deteriorating Euro‑area figures, partially reversing previous underperformance of the pound.
Goldman flags the pound as highly overvalued on its GSDEER metric, with fiscal‑political risk and limited BoE rate‑hike prospects.
The firm warns of asymmetrically negative risks ahead of the May 7 UK local elections and a likely underperformance versus USD and AUD.