"Sterling at 1.26-1.27 is fundamentally undervalued and we believe it should be in the mid-1.30s, although that is contingent on the political cycle", says Investec Chief Economist Phillip Shaw while sharing his view on the BoE monetary policy, markets, UK economy and the British Pound.

Shaw agrees with Governor Carney that now is not the time to hike rates and says political uncertainty is a bigger risk to the UK economy than the inflation overshoot, which is likely to be a short-run phenomena.

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