Energy Crisis Darkens Pound Outlook Even as Market Prices Hikes

Energy Crisis Darkens Pound Outlook Even as Market Prices Hikes

(Bloomberg) --

The prospect of a protracted energy crisis in Europe is muddying the outlook for the pound and outweighing any boost it stands to receive as investors price in a faster pace of rate hikes.

With the continent facing a gas shortage and the U.K. hampered further by damage to its supply network, the risk is that inflation will continue to accelerate this winter, denting consumption. Consistently high energy prices also risk widening the nation’s current-account deficit, weighing on the currency, according to Deutsche Bank AG.