Deutsche Bank economist Thu Lan Nguyen warns sterling may face a period of
volatility amid fiscal policy uncertainty. It is unclear how the new UK
government under Prime Minister Burnham will balance fiscal sustainability with
growth stimulus; Burnham’s push for a new economic model suggests he may pursue
major measures, adding risk to already fragile market sentiment. As part of his
cost-of-living commitments, the government has announced plans to cap most
single-ride bus fares and cut VAT on electricity bills.
