Citi Predicts Pound Will Fall Sharply Against Dollar by End of 2026 - Trade Brains

What the desk is arguing

Citi predicts a notable decline in the British Pound against the US Dollar by the close of 2026. The firm bases this forecast on anticipated economic pressures that may hinder the UK’s growth and lead to a less favorable interest rate environment compared to the US.

Support for this outlook can be found in the evolving economic conditions in the UK, including potential fiscal challenges and lower growth expectations which could result in a weaker currency. Conversely, Citi's stance implies that the recent trends in UK economic recovery will not sustain momentum, contrasting with more optimistic projections from other institutions.

Where it sits in our coverage

Currently, our consensus target for GBP/USD stands at 1.075, with a spread ranging from a low of 1.04 to a high of 1.12. Citi’s bearish view contrasts with our current expectations, suggesting a potential divergence in sentiment regarding the currency's future trajectory.

Specific firm targets show a range of opinions on GBP/USD: - JPMorgan: 1.10 (Mar26) - Barclays: 1.12 (Dec26) - Deutsche Bank: 1.08 (Jun26)

How other firms see it

Some firms maintain a more optimistic outlook regarding the British Pound's prospects. This includes JPMorgan, which remains aligned with a slightly stronger forecast, while Barclays also anticipates a stronger performance compared to Citi's projections.

On the contrary, BofA diverges significantly with a more pessimistic target, expecting GBP/USD to reach only 1.04 by March 2026, reflecting concerns similar to those put forth by Citi’s analysis.

• JPMorgan: aligned
• BofA: contrary
• Barclays: aligned