Citi Pound To Dollar Year-Ahead Forecast: GBP/USD To Hit 1.24 By 2027 - Exchange Rates Org UK

What the desk is arguing

Citi's forecast for GBP/USD at 1.24 by 2027 implies a bearish view on the pound amid prevailing market uncertainties surrounding UK economic stability and U.S. interest rate movements. With the current spot rate hovering around 1.3100 and median targets pointing towards 1.3500 to 1.4000 for late 2026, their outlook appears pessimistic relative to broader market expectations.

Additionally, with substantial upward revisions from other institutions' year-end targets suggesting confidence in the GBP's recovery trajectory, Citi’s stance creates a notable divergence. This perspective likely underestimates potential resilience factors, including ongoing adjustments in UK monetary policy considerations and economic resilience.

Where it sits in our coverage

Our current consensus target for GBP/USD sees a much more positive outlook, projecting a median target of 1.4000 for December 2026, with firms generally estimating a range from 1.3300 to 1.3800 through mid-2026. This dynamic illustrates a robust confidence in the pound's recovery, sharply contrasting with Citi's more cautious approach.

Specifically, the targets from leading banks demonstrate a bullish consensus: - JPMorgan: Dec-26 target of 1.3600 - Morgan Stanley: Dec-26 target of 1.4700 - Deutsche Bank: Dec-26 target of 1.4200

How other firms see it

Other firms largely stand in opposition to Citi’s projections, proposing a more optimistic outlook for GBP/USD based on improving economic indicators and a tightening labor market.

• JPMorgan and Morgan Stanley both project GBP/USD significantly higher by the end of 2026, indicating alignment with broader market sentiment on the potential recovery of the pound against the dollar.