Bank Of America Pound To Dollar Forecast: GBP/USD At 1.40 By End-2025 - Exchange Rates Org UK

What the desk is arguing

Bank of America's projection of GBP/USD hitting 1.40 by the end of 2025 suggests a positive outlook for the pound as it appears to rebound from its recent lows. With current trading around 1.3100, the forecast implies a moderate appreciation driven by potentially favorable economic conditions and interest rate adjustments in the UK.

In contrast, the current consensus among major banks paints a more nuanced view, with targets not venturing past 1.3800. This juxtaposition indicates that the market is currently pricing in a more stable or cautious approach towards UK economic growth compared to BofA's optimistic stance on potential monetary policy shifts.

Where it sits in our coverage

The current median consensus for GBP/USD from various banks is 1.3500 for March 2026 and 1.3800 for June 2026, showcasing a range that encapsulates lower forecasts compared to BofA's 1.4000 target for December 2026. Notably, while most forecasts cluster closely, BofA's more optimistic outlook could suggest an increasing divergence in sentiment as market dynamics evolve.

Specific firms offer varying perspectives, with targets as follows: - JPMorgan: Dec-26 target at 1.3600 - Morgan Stanley: Dec-26 target at 1.4700 - Deutsche Bank: Dec-26 target at 1.4200

How other firms see it

The market sentiment surrounding GBP/USD is split, with several firms adopting a more conservative perspective compared to BofA’s prediction. For instance, Goldman Sachs and ING both project lower targets for March 2026, aligning with an overall cautious outlook.

Key firms with differing stances include: - Goldman Sachs: March 2026 target at 1.3300 - ING: March 2026 target at 1.3500 - Morgan Stanley: March 2026 target at 1.3800