GBP Outlook

The GBP has roughly kept pace with the USD this year, and it is expected to outperform the EUR due to a significant growth differential, headwinds may finally begin to take a toll on cable over the coming year. UK economic growth remains relatively robust, but fiscal consolidation will likely weigh on activity in an environment of surprisingly low inflation and the underpriced impending EU referendum. 

"Against this backdrop, we have pushed back our expectations for BoE tightening from February to May 2016", notes Barclays.

Although the UK is less vulnerable to the risks stemming from China's growth transition, trade linkages will likely further suppress already low inflation and perhaps dim confidence.