Commerzbank: The pound is at risk, and the British Chancellor of the Exchequer may announce a £20 billion fiscal black hole

According to Jinshi Data, Commerzbank said that the pound is at risk because British Chancellor of the Exchequer Lewis may announce a 20 billion pound public finance black hole later on Monday. The Bank of England may also cut interest rates on Thursday.

The bank's foreign exchange analyst Michael Pfister said in a report that the British government may need to make difficult decisions to plug the fiscal black hole.

He said the Bank of England is likely to cut interest rates on Thursday, though the pound's reaction will depend on the plausibility of such a move. Given the continued rise in core inflation, the Bank of England may have to sound a fairly cautious tone to continue to support the pound.