A weaker British pound (GBP) could help revive overseas demand for UK assets, but investors may remain cautious until the outlook for Bank of England, Federal Reserve and European Central Bank rates becomes clearer. A single-outlet report published by FXStreet on Oct. 28 attributed that assessment to Geoff Yu, BNY’s senior EMEA market strategist.
Yu’s reported view is that currency swings add to uncertainty for cross-border investors. He said a weaker trade-weighted pound, fiscal credibility and peaking real yields could together help support a broader recovery in overseas flows. FXStreet also reported that Yu expects one more Bank of England rate hike in the current cycle.
The latest official data offer a lagged snapshot of both foreign and domestic investment. The Office for National Statistics recorded £36.3 billion of foreign investment in UK debt securities in April-June 2026. Separately, Bank of England data show UK monetary financial institutions, excluding the central bank, increased gilt investment holdings by £14.404 billion in the quarter. The ONS debt-securities figure is broader than gilts, and both data sets predate the October market conditions.
The rate outlook remains contested. The MPC held Bank Rate at 3.75% in September in a 6-3 vote, with three members preferring an increase to 4%.
