Economist predicts sterling will get weaker

The price of sterling could get weaker during the next couple of months of Forex trading, as uncertainty surrounding the general election in the UK is likely to cause the value of the currency to weaken.

This is according to economist for Investec Securities David Page, who advised investors not to purchase the currency.

"We wouldn't be buying sterling at this stage," he stated.

The pound weakened against the euro on Friday, with the release of weak UK retail sales figures for December pushing the European currency to 87.38p, Reuters reports.

However, Mr Page noted that, with the political uncertainty removed from the equation, sterling is currently "desperately undervalued".

"Our analysis suggests that it could be close to 25 per cent undervalued against fair value to the euro," he remarked, adding that while it is unlikely there will be any gains over the coming six months, increases should take place within the next two years.

Posted by Greg Secker