Goldman Sachs strategist Stuart Jenkins noted that the UK's combination of fiscal tightening and monetary easing policies will negatively impact the pound, particularly against other European currencies. The bank's revised exchange rate targets are: EUR/GBP at 0.89 in three months, 0.90 in six months, and 0.92 in one year—slightly higher than August's forecast.

Jenkins stated, "We expect UK fiscal constraints to remain a key challenge for sterling, especially relative to European currencies within the G-10." He added that "heightened risks" in the UK labor market could create downward pressure on interest rates.

The team recommends shorting GBP/SEK with a target of 12.10 and a stop-loss at 12.80.