Barclays' latest research shows that the pound exchange rate has not yet hit the bottom. Analysts at the bank believe that the pound will fall further in the second half of 2022, but by 2023, the pound may be ready to climb again, especially against the US dollar.

Themistoklis fiotakis, head of foreign exchange research at Barclays in London, said: "we expect the pound to fall against the dollar in the near future before slowly rising in the medium term."

Meanwhile, Barclays expects the euro to fall further against the dollar, possibly to 1.11.

Fiotakis believes that the recent downward risk of sterling mainly comes from potential differences in monetary policy.

The Bank of England may start the interest rate hike cycle earlier than other central banks, but the recent poor performance of sterling against currencies such as the euro and the US dollar suggests that investors are beginning to doubt whether the Bank of England is eager to raise interest rates in the face of soaring inflation.

In view of the market expectation that the Bank of England will raise interest rates by 50 basis points in August, the Bank of England must fulfill this commitment in order to keep the pound at its current level. This in turn means that if the Bank of England is more cautious in the future, the pound will face downside risks.

Fiotakis said that if the Bank of England's interest rate increase is lower than market expectations, the depreciation of the pound may exceed market expectations, and the euro will move towards 0.90 against the pound.

However, if the Bank of England does pursue higher interest rates more actively, the pound will be better supported.

Barclays' basic prediction for the exchange rate of sterling against the US dollar is that as the Federal Reserve continues to raise interest rates more than other central banks, the exchange rate of sterling against the US dollar will fall further.

Barclays expects GBP / USD to be 1.17 and 1.22 respectively in the third quarter. Barclays' current basic estimate of the euro sterling exchange rate is 0.87 at the end of September and 0.87 at the end of the year.