Will sterling hit parity with the US dollar?

Weekly review by Steven Bell , Chief Economist (EMEA) at Columbia Threadneedle Investments

Following comments from Fed chair Jay Powell, markets are pricing in a faster pace of tightening over the next few months. The Fed also concedes unemployment will have to increase to rein in inflation.
In Europe, the soaring cost of energy will push the continent into recession. Interest rates will have to rise but domestic sources of inflation are nothing like as strong as in the US.
A high-risk, high-return strategy response to the UK’s cost-of-living crisis could have disastrous consequences for sterling.
All this is bad news for risk assets and equities look to be headed lower.