UK budget tightening could dent the pound, market strategists warned. Morgan Stanley strategists said GBP has "almost priced in all the positives" and warned investors may be too optimistic; they see GBP/USD sliding to about 1.30 by year-end from roughly 1.33 now and expect further weakness next year. Markets expect Chancellor John Healey to unveil a fiscally cautious budget on Wednesday. Strategists at Spain's External Bank and Crédit Agricole also project year-end GBP/USD around 1.31 and flag

UK budget tightening could dent the pound, market strategists warned. Morgan Stanley strategists said GBP has "almost priced in all the positives" and warned investors may be too optimistic; they see GBP/USD sliding to about 1.30 by year-end from roughly 1.33 now and expect further weakness next year. Markets expect Chancellor John Healey to unveil a fiscally cautious budget on Wednesday. Strategists at Spain's External Bank and Crédit Agricole also project year-end GBP/USD around 1.31 and flag potential sterling weakness versus the euro; the euro has been under pressure after recent turmoil in the French government bond market.