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Barclays expects pound sterling to recover against the euro in 2026.

Barclays expects pound sterling to recover against the euro in 2026, but only if the UK restores fiscal credibility at November’s Budget amid an economic backdrop that analysts say still carries clear stagflationary features.

The bank says sterling’s fortunes are now "inherently linked" to the 26 November statement, which it says does not require an unusually high standard to rebuild confidence.

💬 "The bar for a credible Budget should not be particularly high given more positive underlying fiscal dynamics than in other G10 peers," Barclays says in a research briefing released November 17.

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