JPMorgan’s GBP/USD exchange rate forecast falls to 1.28 by December 2026, putting Pound Sterling at the bottom of the latest consensus range.
Foreign exchange analysts a JPMorgan expect the Pound to Dollar exchange rate to fall from 1.3541 to 1.28 by the end of 2026, a decline of roughly 5.5% if its forecast is realised.
The bank’s end-period path puts GBP/USD at 1.31 in September, 1.28 in December, 1.29 in March 2027 and 1.28 in June 2027.
The signal therefore extends beyond one policy meeting and across 2027.
That is a conspicuously bearish destination: the Exchange Rates UK Research Currency Forecast Sentiment Survey has a fourth-quarter median of 1.3446 and a range of 1.28 to 1.40.
JPMorgan’s 1.28 therefore sits at the survey floor rather than near its centre.
The UK rate gap is the pressure point
JPMorgan’s table supplies the path rather than a pair-specific explanation; Goldman Sachs offers a separate rates argument for Sterling weakness.
Goldman said its economists are calling for “no hikes this year (30bps priced), and two cuts next year, which relative to current pricing (shown below) remains a risk for GBP over the medium-term”.
Such a repricing would erode Pound Sterling‘s carry support.
The Bank of England held Bank Rate at 3.75% on 29 July, although three of nine policymakers preferred an increase to 4%.
Lloyds said “payrolled employment has now declined in each of the past six months”, with timely indicators continuing “to point to subdued labour demand”. Private-pay data, it added, “provide little evidence that domestically generated inflation pressures are beginning to re-intensify”.
Yet the conflict-driven energy shock means the path is not one-way.
Lloyds observed that “financial markets continue to anticipate Bank Rate moving higher over the coming months”, while the policy outlook “continues to hinge largely on global developments”.
It added that “a 25bp increase is not currently fully priced until the December MPC meeting, suggesting investors do not expect policymakers to respond aggressively in the near term”. That timing makes JPMorgan’s 1.28 destination a challenge to the current UK rate curve, not merely to spot sentiment.
That leaves the JPMorgan GBP/USD forecast as a test of which influence wins: weaker domestic labour conditions or another inflation impulse from energy.
If rate expectations are repriced towards Goldman’s path, 1.28 becomes easier to defend; if the Bank tightens, the survey’s higher Sterling outcomes remain live.
Our currency coverage draws on live market data, official economic releases and published bank research.
