MUFG: AI Stock Selloff Could Weaken Sterling

【MUFG: AI Stock Selloff Could Weaken Sterling】

⑴ MUFG Bank analyst Hardman said in a report that an intensifying selloff in AI-related stocks could weaken the British pound.

⑵ He noted that further declines in AI stocks and the resulting tightening of global financial conditions could reduce the Bank of England's willingness to further tighten policy, thereby putting pressure on the pound as a high-yielding G10 currency.

⑶ Hardman said the sharp drop in tech stocks was one of the factors behind the pound giving up its initial gains after the Bank of England raised interest rates by 25 basis points on Thursday.