Toxic Cocktail Threatens Pound’s World-Best Gains, RBS Says

Current-account and fiscal deficits as well as growing political risks may prove a “toxic cocktail” for the pound’s world-beating gains, according to Royal Bank of Scotland Group Plc.

Investors should sell the U.K. currency against the dollar on a “tactical” basis, Paul Robson, a London-based senior strategist at the U.K.’s biggest state-owned lender, said by phone today. Robson correctly predicted at the end of January that sterling would add to gains versus the dollar that made it the best performer among major peers in the past 12 months. The pound broke a run of four straight losses against the dollar today and was little changed against the euro.