According to Jinshi, ING said that the lower-than-expected inflation data released by the UK on Wednesday may cause the pound to underperform for some time.

ING economist Francesco Pesole said the data paved the way for the Bank of England to cut interest rates at its November and December meetings.

Pesole noted that Bank of England Governor Andrew Bailey recently hinted that the pace of rate cuts could accelerate, and the market may be pricing in the possibility of a 50 basis point rate cut in November.

He also mentioned that positioning ahead of the UK budget on October 30 and the U.S. presidential election in November could further weaken the pound.