A new forecast warns that those hoping for better pound exchange rates could be bitterly disappointed.
We have reported time and again on how the finance world's leading analysts continue to predict a higher GBP to EUR exchange rate.
For instance, Intesa Sanpaolo and Lloyds Bank are both pricing in rates at 1.46 and above by the end of 2015.
It is warnings for a decline towards the 1.30 level that are actually looking to be the more accurate at this stage.
“Sterling continues to look a little vulnerable against the ‘comeback’ euro and having breached 1.3450, looks set for a test back below 1.30 in the months ahead," says economist Chris Towner at currency brokers HiFX.
Sterling fell by 1% against the dollar and the euro this morning, reaching its lowest level against the euro since May as figures showed headline inflation turned negative again last month.
The continued lack of price pressures is great news for consumers who are being treated to an early Christmas present with a combination of good deflation amid higher wage pressures.
However this lack of inflation is clearly also playing against those looking to make international paymentswith their sterling.
However, news that the trade deficit had grown to over £11bn in August demonstrates that we are still importing too much and exporting too little.
The weaker British pound will therefore be welcomed by exporters eager to boost their order books.
Although UK economy continues to perform relatively well the lack of any inflation - and indeed the return of disinflationary pressures into the price pipeline - is sure to keep MPC members firmly neutral for the time being.
And until we start seeing some upside pressures on inflation we will unlikely revisit the year's best exchange rates in GBP/EUR.
