Goldman expects Pound Sterling’s recent advantages to fade. Westpac forecasts a 2027 recovery even with US interest rates staying high.
Goldman Sachs and Westpac forecast sharply different paths for Sterling, with their projections roughly a year ahead standing ten cents apart.
Goldman targets 1.28 in twelve months, against Westpac’s 1.38 for September 2027, rising to 1.39 that December.
The Pound to US Dollar exchange rate (GBP/USD) recovered to around 1.3369 on Tuesday after dipping to 1.3329, leaving it little changed from Monday’s close but around 1.3% lower this month.
Pound to Dollar (GBP/USD): 1.336071 (-0.06%)
Euro to Dollar (EUR/USD): 1.146203 (-0.01%)
A November hike may offer limited support
Goldman expects a November BoE hike following last week’s 6-3 vote to hold rates at 3.75%, but thinks markets anticipate too much further tightening.
It also sees Budget risks, given rising energy and borrowing costs, concerns sharpened by Tuesday’s £18.3bn August borrowing figure.
Goldman distinguishes near-term stability from the longer-term risks:
“That recent stability likely extends for the next few weeks, but further ahead, we think risks are skewed toward recent Sterling tailwinds petering out, and a shift to GBP underperformance.”
Goldman’s three-month forecast is 1.33, broadly comparable with Westpac’s December 2026 call of 1.35, before Goldman projects 1.29 at six months.
Westpac expects restrained UK tightening too:
“We expect the Committee will decide to hike into year end, but likely only once.”
Its Sterling recovery accompanies a US rate outlook that allows no cuts next year:
“Rate cuts will not be seen until 2028, however, and they are likely to only reverse the current tightening sequence,” Westpac says.
It forecasts the Pound at 1.40 by December 2028.
Closer to today’s market, JPMorgan identifies support at 1.3280-1.3300 and resistance at 1.3460-1.3470.
Tuesday’s rebound has kept Sterling above that support, with Wednesday’s preliminary business surveys the next domestic test highlighted by the bank.
Our currency coverage draws on live market data, official economic releases and published bank research.
